The Government sends to Congress the forgiveness of the regional debt where it faces the Junts blockade

The Government approved this Tuesday in the second round the bill to forgive up to 83,000 million of debt to the autonomous communities. The law will now travel to the Congress of Deputies, where it faces difficult parliamentary processing and will likely encounter a blockade by Junts. The pro-independence party led by Carles Puigdemont continues to maintain that it will stop the Government’s initiatives, despite attempts at rapprochement by the Executive.

The bill that now reaches the Cortes proposes that the State assume a maximum of 83,252 million euros of the regional debt. A figure that would allow savings in interest of around 6.7 billion euros, the minister spokesperson, Pilar Alegría, recalled in the press conference after the ministers’ meeting. An amount of savings that the Government insists can be used to improve public services, but that organizations such as Airef have indicated does not influence the spending rule. So, consequently, it would not allow a greater margin in the disbursement that public administrations can make.

Last September, when the Council of Ministers first approved the condonation, María Jesús Montero, promised to have the law ready before April so that the communities that want to benefit from the reduction can outline the technical details before the summer. The first vice president and Minister of Finance then revealed that The autonomies will have a limited time to request condonationalthough he did not reveal more details about the deadlines.

Even if the law to forgive the debt passes through Congress, something that seems complicated given the delicate balance of forces, it will have been of no use if the autonomous communities do not request it. The autonomous governments of the PPwhich directs 11 of the 15 autonomies that could opt for the reduction (Navarra and the Basque Country are excluded as they do not belong to the common regime), They continue to reject the measure en bloc.

The popular They reject the way in which the condonation has been designed – first agreed between the PSOE and ERC with a figure for Catalonia and then extended to the rest – and maintain that interest savings cannot be used for social spending, in line with what the Tax Authority defends.

At this time, only the communities governed by the PSOE (Catalonia, Asturias and Castilla-La Mancha) would be willing to accept the proposal (Canary Islands, which runs the Canary Coalition, has also refused). Together they add up to 23,539 million, that is, just 28% of the entire reduction that the Treasury has calculated.

However, beyond the debate about whether or not it can be allocated to social spending, the truth is that the debt relief would alleviate the financial situation of many communities who are far from being able to finance themselves. Airef itself, although it has been critical of the design of the standard, recognizes that the financial sustainability of the communities would improve “significantly.” Sources from the organization indicated in November that it would be difficult to understand that there are communities that reject this possibility, especially the worst financed.

Andalusia and Catalonia, the most benefited

The distribution of the 83,252 million that would be forgiven with the law would especially benefit Andalusiato whom would they correspond 18,791 millionand Catalonia, which would enjoy a tax relief of 17,104 million. After them, the Valencian Community appears, with 11,210 million assigned, Madrid (8,644 million), Castilla-La Mancha (4,927 million) or Galicia (4,010 million).

Behind them, appear Castile and León (3,643 million), Murcia (3,318 million), Canary Islands (3,259 million), Aragon (2,124 million), Balearics (1,741 million), Estremadura (1,718 million), Asturias (1,508 million), Cantabria (809 million) and Rioja (448 million).

The amount of debt that was forgiven to the regional administration would not disappear. It would become part of the balance sheet of the State, which would have to pay the interest and refinance it if necessary.