Does anyone in their right mind believe that Catalonia, Valencia, Andalusia or Murcia will one day be able to pay their debts to the State? Where does the money come from? Of multiplying the tax pressure on its citizens? Of jibarizing their own administrations to the point of exhaustion? The most striking thing about the uproar organized by the PP against the investiture pact and the amnesty is that it ended up charging against a reduction in the regional debt of which that same party was the first promoter.
Recognizing and accepting that it is impossible, as well as possibly incorrect, to repay that debt is nothing new, now discovered in a perverse negotiation resulting from the political needs of Pedro Sánchez for his inauguration. It was known from the very moment in which the Government of Mariano Rajoy, then also president of the PP, created the mechanism for the State to keep the debts that the autonomous communities could neither pay nor renew, the FLA and others similar .
The executor of this rescue program, head of the Ministry of Finance, Cristóbal Montoro, had to think and propose, with relative success, plans to deal with the fact that the debt was unpayable. Now, putting debt reductions with the State on the table represents a pure acceptance of reality. Of course, with a delay of a decade and showing that the debt itself is no longer the problem, since it is automatically renewed year after year and without any prior formality, which has not stopped growing. Interest is what it is, which does weigh on the accounts. And this is due to the absence of a new regional financing system that fixes the basic problems.
When the FLA was launched in 2012, the debt that became in the hands of the State was as unpayable as it is now, as it was the consequence of the financial bankruptcy of the most populated autonomous communities most affected by the financial crisis of the 2008. Less Madrid, of course, at that time just like today, sheltered in the capital to live sheltered from crises.
The Great Recession sank the collection of territorial administrations - linked above all to the real estate bubble through the taxes generated by the excessive sale and purchase of apartments - while they had to continue providing basic services such as education and, above all, healthcare. Also the dependency law, which the Government of José Luis Rodríguez Zapatero had approved without transferring new resources to the autonomies to apply it. And the more competitions, the more disaster. Hence the enormity of the Catalan, although in percentage of its economy, it is not the one that heads the long list.
At that critical juncture, the State, that is, Rajoy and Montoro, chose to secure the money to meet the payment of its own commitments to its creditors, plus pensions and the runaway unemployment insurance, and ignored the needs of the autonomies. These were left without income and without being able to finance themselves in the markets, which in the midst of the euro crisis did not lend them a single cent more.
Only when it began to become clear that the central administration would not withstand the global financial consequences of the tsunami that would be caused by the shock wave of a suspension of debt payments for an autonomous community such as Catalonia or Valencia, was the new FLA mechanism created. Either these debts would be assumed or the bankruptcy would advance like a domino from the autonomies to the heart of the public Treasury.
But beyond that, nothing else changed in the financial conditions of survival of the autonomous administrations. Its deficit continued to gallop, despite the cuts, in the case of Catalonia, from the first era of Artur Mas, or María Jesús Montero, then Health Minister of the Andalusian Government of Susana Díaz. The basis for the continuity of the problem was poor financing in the face of growing spending needs.
And what now seems like Sánchez's surrender to Carles Puigdemont or Oriol Junqueras, the removal of 20% of the debt, is small to the size of an atom, compared to the measures that the willful Montoro put on the table in those financially turbulent years.
The minister traced several possibilities. The first, a classic haircut, at a rate of 10% of the total debt each year. That is, in a decade the debt would have been extinguished for the communities that had resorted to the FLA. Not for the State, that is, for all taxpayers, who, as now, continued to bear that debt on their shoulders.
It was also proposed to convert the debt into perpetual debt with symbolic interest, a gentler way of applying the reduction. The debt is not returned although it remains registered in the accounts of all participants. A modality that could arouse less criticism in Brussels, which feared that the autonomous communities would take it as an open bar to increase their expenses, as explained by the Minister of Economy at the time, Luis de Guindos.
Partly for this last reason, none of this could be approved and the Treasury opted for a middle-of-the-road modality, that of lengthening terms, reducing interests and the partial contribution of new resources to the suffocated communities. A classic kick forward, which in practice means moving the delicate issue of finding a definitive solution to a later time. Now, the political situation has generated that moment of truth.
But spreading a morbid punitive attitude that considers that punishment should never stop being applied if it serves to satisfy whoever imposes it, some defend that debts should weigh eternally on citizens regardless of the causes that generated them and the justice of their origin. The funny thing is that some of those most vociferous now against the haircut, the territorial barons of the PP, who also need it, seem to prefer to be one-eyed in exchange for having blind people.
