The first Fiscal and Financial Policy Council after the 2023 electoral cycle was held yesterday in an atmosphere of tension with the autonomous communities of the PP, which are the vast majority. The fourth vice-president and Minister of Finance, María Jesús Montero, informed the governments that they will receive the record figure of 154,467 million from the financing system. They are 20,000 million, 14.9% more than this year, not including European funds. Catalonia, in particular, will be able to dispose of 29,826 million, 18% more. In addition, Montero said that the central government will approve today in the Council of Ministers the spending ceiling and the budgetary stability path for all public administrations in 2024. The autonomous regions will be allowed a deficit of 0, 1%, thus confirming the figure advanced in the budget plan sent to Brussels in October. It is one tenth less than the target set in the April Stability Plan. However, up to fourteen regional councilors of the PP voted against it, which advances a tortuous parliamentary procedure.
Montero explained to the regional councilors - they all attended except for the Catalan, Natàlia Mas (in her place the Secretary General of Economy and Finance, Josep Maria Vilarrúbia, and the Director General of Budgets, Esther Pallarols went) and the Basque, Pedro María Azpiazu – that never before had the autonomous communities received so many resources from the central administration. According to the Treasury, during the five years of Sánchez's mandate, he has contributed almost 180,000 million more than the last five years of Rajoy's government.
One of the Council's most tense moments came when it came to addressing the deficit for 2024. The 0.1% limit was considered "unfair and disproportionate", according to several PP councillors, because the Administration central reserves the bulk of the margin, 2.9% of GDP. Town councils must meet budget balance.
The PP now has the power to veto this path of stability in the Senate, where it has an absolute majority. It is a possibility that the Spanish Government has. For this reason, the Treasury issued a report from the State Attorney's Office yesterday in which it is stated that, if the Upper House rejects the proposal twice, the deficit targets set in the Stability Plan would come into force. This path was more demanding than the one that was finalized yesterday, since the autonomous communities would have to go from a deficit of 0.1% to a balanced budget; and local corporations, from balance to a surplus of 0.2%.
Montero warned that if the opposition ends up stumbling down the road to stability, its regional and municipal governments should make a bigger fiscal adjustment to their budgets. "The PP would be throwing stones at its own roof", he said. Catalonia, which configures its public accounts with a deficit of 0.1%, would also have to make adjustments, as Vilarrúbia explained at the meeting in Madrid.
Several Ministers of Finance of communities governed by the PP and that of Castilla-La Mancha questioned Montero about whether the Central Government had negotiated any unique financing with Catalonia, as Minister Mas said. The fourth vice-president replied that neither the ministry nor the PSOE had addressed this possibility either with Junts or with ERC.
The reform of the regional financing model was also discussed at yesterday's Fiscal Policy Council. Several councilors of PP governments, such as those of the Valencian Community, Andalusia or Murcia, among others, reproached the Treasury for not including this item on the agenda. Montero asked, for his part, that the popular executives give up "positions of maximums and that they be pragmatic" in order to reach an agreement. "We are betting on a dialogue between political parties who, in the end, are the ones who will approve the model in the General Courts with a qualified majority", defended the minister. He reiterated Sánchez's offer to Feijóo to create an ad hoc working table and said that "what the PP cannot do is have different positions in Galicia, Madrid and Andalusia; will have to vote for the proposal that comes closest to the general interest". The Treasury cooled the proposal of various autonomies to activate a transitory fund until the financing reform.
The cancellation of Catalonia's debt with the FLA agreed with ERC was also a reason for confrontation. The ministry announced to the communities that it will hold bilateral meetings with councilors in January to specify the forgiveness that will be done in each territory. Communities, such as Madrid, which were able to go to the markets during the crisis, will be applied a similar criterion to cancel debts with financial institutions, said Montero.
