Editorial 22 November 2021
Artur Mas presents his proposal for a fiscal pact in the plenary session of the Parliament of Catalonia
The reform and updating of the regional financing system is a very difficult puzzle to solve. It is not surprising that all governments, from 2009 until now, have chosen to apply only patches – depending on the financial urgencies of the autonomies – and pass the hot potato to the next. The matter is further complicated by the fact that the bilateral negotiation with Catalonia has come into play, even if it is not on financing.
The President of the Government, Pedro Sánchez, earlier announced his will to establish a new regional financing model and has recently reiterated this commitment. Along these lines, the Minister of Finance, María Jesús Montero, had said that this same month of November she would have a reform project about to start negotiating, but it already seems impossible that she can meet this deadline. The minister herself has recognized the difficulty of the task by stating that the reform of the autonomous financing system needs, in parallel, a fiscal reform that provides more resources to the autonomous communities, either through transfers or through greater regulatory capacity. The great differences in criteria between autonomies, likewise, make it impossible to move towards a consensus position, as would be advisable in a reform of this magnitude. But this can never be achieved without a prior agreement on the general framework between the two major parties, PSOE and PP, which govern in most of the autonomies. That, in turn, constitutes another great obstacle that is difficult to overcome if a vision of the State is not imposed above party interests. Obviously, to achieve this it will be necessary for everyone to give in to their preliminary positions.
The functioning of the autonomous system requires a fair distribution of resources
In this framework of opposing positions, tomorrow the presidents of eight autonomies of three different parties, PSOE, PP and Regionalist Party of Cantabria, will meet in Santiago de Compostela, to try to unite positions in view of the need to promote new regional financing. Three other communities have organized parallel working groups.
Catalonia, which is also affected by the current system and has always led this type of negotiation, should closely follow the debate and actively participate in defense of its positions, regardless of the bilateral dialogue – of uncertain future – that it may maintain with the Government.
It must be borne in mind that the majority of autonomous communities will be especially belligerent with the account of bilaterality. Given this, the Generalitat should not fall into the temptation to stand up to the collective bargaining of the new financing. On the contrary, it must argue with objective data the criteria for which it demands more resources. In no case is it about obtaining privileges but about receiving fair and equitable financing. Just presenting the reality would suffice. In the current system the ordinality principle, as the most obvious example, is not fulfilled. Although Catalonia’s contribution to the system is 20% higher than the average, on the other hand, it is below the territorial average in resources received per inhabitant.
Given the existing difficulties, the Government is already talking about arbitrating a transitional system, which was in force while a definitive agreement was not reached. This alternative would suppose a new patch and postpone sine die the solution of the problem that already accumulates seven years of delay. The proper functioning of the Autonomous State, however, depends on the possibility of channeling an equitable and sufficient financing system, which guarantees above all the correct provision of the basic services that the Autonomous Communities attend to, such as health, education and health, social assistance, among others. It is one of the great pending political challenges.