July 5, 2020

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Home » Content » The debt of the Catalan Government soars since the beginning of the ‘procés’
The Govern asks for more resources from the central Government and does not renounce self-determination, but the money it owes is close to 80,000 million euros with 75% in the hands of the State

16.06.2020 00:00 h.
The Vice President of the Generalitat and regional minister of Economy, Pere Aragonès (ERC) / EFE

A permanent contradiction. While more resources are demanded from the central Government due to the Covid pandemic and the political project that asks for the right of self determination is maintained, the Generalitat increases its dependence on the central Executive and accumulates a debt that is close to 80,000 million euros, and which has exploded since the start of the ‘procés’ in 2012: since then, it has gone from 35,000 to 79,000, an increase of 126%. During this period, the Catalan administration has suffered a decrease in income, during the course of the economic crisis that started in 2008, but has not made an effort to compensate for this in the expenditure area.

The Vice President of the Generalitat, Pere Aragonès, demanded this Monday that the Government put on the table a fund of 25.000 million for the autonomous communities and raise the initial idea, which has 16,000 million. The argument is that, with that figure that the Government has proposed, Catalonia would receive some 3,200 million and the needs reach 5,000 million to alleviate spending on health, education, social services and also offset the decline in income due to the economic slowdown during the pandemic.

Maximum dependency, in 2022

Aragonès, head of the Economy department, however, clung to the independence project with the aim of bringing the Government to the negotiating board and looking for a way out so that the Catalans “can vote”. But what about the public accounts of the autonomous administration? Of the total debt, 75% is in the hands of the Government, of the Kingdom of Spain, and it is the Spanish Treasury responsible for placing all that debt on the markets, with the impossibility, on the part of the Generalitat, of go on its own to private and institutional investors.

Of the total liabilities, and at the end of 2019, the State has in its portfolio up to 59,666 million, of the total of 79,060, as pointed out by the Bank of Spain. In the projection of the economic organism of the State it is foreseen that this process will go further in the coming years, with the peak in 2022. At that moment, nine out of ten euros of the financing needs of the Generalitat will be borne by the central Government. In fact, what comes from the State to the Generalitat as financing is used to a large extent to pay for the credits assumed with the Kingdom of Spain.

Asking for resources to finance

The dependency situation has turned out to be a paradox. As the Govern of the Generalitat, in pro-independence hands during the last ten years, was accelerating the so-called sovereignty process, funding by the State has been greater. If in 2012 the State as a creditor had 13.2% of the debt, it amounted to 30.6% in 2013; and it was almost 40% in 2014. In 2017 it already reached 70% and it was 75.4% in 2019.

The department headed by Pere Aragonès requested up to 7,998 million in 2019 from the so-called Financial Facility, the instrument that replaced the FLA, and that Catalonia could leave in 2018 due to the significant reduction in the deficit that it had undertaken. With much more bearable conditions for the autonomous administration, the Generalitat paid out of that total of 7,998 million orders to 6,713 million to return to the State. And in 2020, of the 10,224 million that were requested, 7,681 are for the amortization of State loans.

Up to 5 billion

That situation will change now, pending the Generalitat of the funds that come from the Government due to the Covid pandemic. Aragonès is requesting 5,000 million, which would only be “to stop the impact” in areas such as health and social services.

The dependency of the Generalitat, with a debt that does not stop increasing, although in recent years at a slower rate, is total with respect to the Kingdom of Spain, which has become the main and only banker of the autonomous administration, in the hands of the pro-independence crew.

https://cronicaglobal.elespanol.com/politica/deuda-generalitat-se-dispara-proces_358104_102.html

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