The risk rating agency DBRS has improved the outlook for Catalonia from stable to positive after the agreements for the investiture of President Pedro Sánchez between the PSOE and ERC, which include the forgiveness of 15 billion euros of debt. The agency, which maintains the community's rating at BBB (just above junk bond consideration), values “the region's track record of improving its debt indicators since 2016” and “the financial support provided by Spain.”
In the agency's opinion, “the relationship between the regional government and the national government has slowly but steadily strengthened in recent years.” However, he recalls that “the question of independence remains a structural issue” and that “sporadic tensions could resurface.” In any case, the agency's analysts make it clear that the economic and financial institutional relationship “will not deteriorate significantly.”
Catalonia's ratings - according to DBRS - could also improve if "the region continues its fiscal consolidation towards a balanced budget position and improves the sustainability of its debt or Spain's rating is improved." On the other hand, the outlook could become stable if the debt reduction is not carried out.
Improving the outlook is one of the actions necessary for Catalonia to return to the debt markets. Since the financial crisis, the Generalitat has been financed by the State through the FLA (Autonomous Liquidity Fund). This mechanism provides resources to the autonomous communities that cannot be financed in the markets. Furthermore, the cost is much lower than other systems.
