Tension between the communities and the Treasury over the management of EU funds. The first sectoral conference on the management of the recovery plan, held this Thursday, ended with the decision of the ministry to review the regulations that determine the functioning of this body in the face of pressure from various regions to have greater co-governance. The meeting had already started with complaints from the PP advisers about the distribution of European funds.
Not only the communities of the PP and Ciudadanos, but also others such as the Basque Country and Catalonia, asked this Thursday to modify the internal organization regulations of the sectoral conference on the management of European funds. The main complaint to this body is the weight attributed to the Ministry of Finance in decision-making, assigning it 19 votes (the same as autonomous communities and cities), plus one for quality, as is the case with the Fiscal Policy Council and Financial ―where the Treasury and the communities debate matters related to regional financing―. The regions will now send their allegations for the ministry to present a new proposal.
The change will not modify, however, the criteria for the distribution of aid, a point that has raised criticism from the communities governed by the PP. Andalusia, Castilla y León, Galicia, Madrid, Murcia and Ceuta signed a joint statement on Wednesday denouncing that the system for allocating the European REACT-EU fund – of which 10,000 million corresponds to it – has been “questionable both in the forms and in the background”.
The Treasury announced last December the details of the distribution of this aid. The criteria for assigning this bag of money, which aims to reactivate the economy after the blow inflicted by the pandemic, are the same as those established by Brussels for the States, and the ministry communicated them to the finance advisers in the Fiscal Policy Council and Financiera that took place in October.
There are three criteria used and they revolve around the fall in activity, the increase in unemployment and the youth unemployment rate, with different weightings. The first point refers to the weight of each community in the contraction of the national GDP in the first semester of 2020 compared to the same period of 2019. “For the estimation of this indicator, the most up-to-date data available published by Airef have been used, at the regional level, and by the INE, at the national level ”, reads the letter sent by the Treasury to the general directors on December 29, 2020. To the figures obtained, the ministry led by María Jesús Montero has later applied a correction, based on the wealth of each region —in terms of GDP per capita— compared to the average for Spain.
The second criterion used weighs 23% on the distribution and takes into account the blow that the recession has caused in the workplace. Three-quarters of this amount reflects the weight that each autonomy had over the total unemployed at the beginning of 2020, and the remaining 25% considers the increase in the unemployed between January 2020 and the average between July and August of the same year. In the same way, the third and last element considered works to distribute the REACT-EU fund among the regions, which refers to youth unemployment and has a weight of 11%.
Based on these calculations, the Treasury announced at the end of December the amount that would be assigned to each community. Andalusia, Catalonia, the Community of Madrid and the Valencian Community are the regions with the highest allocation.
Shortly after the details of the distribution were known, several regions denounced the lack of transparency in the process and unilateral decision-making by the Treasury. The Community of Madrid sent a letter to Montero denouncing that no official calculation has yet been published on the fall in regional GDP relative to the period taken into account to calculate the allocations, and that it is not clear what basis has been used to determine the evolution of the unemployment rate. Other communities, such as Castilla y León, have regretted that the distribution does not take into account either the population or the territorial extension.
In the joint statement on Wednesday, in which the PP councilors redouble their complaints, it is insisted that the allocation has been made “with criteria and data that are not transparent”, without giving procedures to the communities and benefiting “some regions in front of others attending exclusively to political reasons ”. For this reason, the six councilors ask the Treasury to convene a Fiscal Policy Council to fix a new distribution and agree to transfer to the European Commission what they consider to be a “deficient management of Spain by the Government of Spain with respect to information on European funds.”