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Home » Content » Moody’s says that the decline of pro-independence reduces political risks for Catalonia
The rating agency considers the outcome of the Catalan elections to be positive for the valuation of regional debt

Gabriel Trinidade 16 May 2024

Citizens voting in the Catalan elections last Sunday / Mané Espinosa

The rating agency considers the outcome of the Catalan elections to be positive for the valuation of regional debt

The debt rating agency Moody’s considers the result of last Sunday’s Catalan elections to be beneficial in terms of finances for the Generalitat. Specifically, it points out in a report that the decline of independence and the victory of the PSC reduces the risk of confrontation between the autonomous administration and the central government.

The firm also points out that the result guarantees the partial cancellation of the Generalitat’s debt, agreed between ERC and PSOE. The write-off amounts to 19% of the 15 billion in liabilities. Moreover, the election results increase the likelihood that a new fiscal framework will be created that would give Catalonia more fiscal autonomy.

The firm also points out that the result guarantees the write-down of Catalan debt.

Moody’s notes that the constitutionalist parties (PSC, PP, Vox, Comuns) won 74 seats, well above the 61 seats won by the pro-independence parties (Junts, ERC, CUP and Aliança). ‘This shows a significant decline in public support for regional independence compared to seven years ago, when the Catalan government unilaterally declared independence after holding an illegal referendum, triggering a political crisis between the region and the central government,’ it says.

The rating agency believes that ‘the decline of pro-independence parties reduces the risk of confrontation between the central government and the Catalan government, while offering President Sánchez’s diverse and narrow majority the opportunity to focus on addressing structural challenges at both the regional and national levels. ‘These challenges include reforming the regional funding mechanism and preparing the budget for 2025,’ he says.

https://www.lavanguardia.com/economia/20240516/9648177/moody-s-dice-declive-independentismo-reduce-riesgos-politicos-generalitat.html

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