Monday, January 24

Madrid frustrates the Consell’s plan to compensate for under-financing


The Minister of Finance, Vicent Soler, carried a proposal under his arm and raised it. With the endorsement of the Cortes-Consell commission meeting the day before and the report of experts, he requested to reserve 2,000 million of the 13,000 million of the covid fund to compensate communities, such as Valencia, who suffer financial abuse. Of this amount, 1,058 should stay in the Valencian Community. The request did not go ahead due to the reluctance of some communities, especially, as Soler, from Madrid, later remarked. According to the account of the minister, the Minister of Finance, Maria Jesus Montero, picked up the glove and raised the proposal to vote on the spot. However, the issue generated debate and rejection, as some territories stated that the issue was off the agenda and could generate legal problems. According to Soler, the Community of Madrid “minimized” the problem of under-financing. Finally, the minister withdrew the vote. To questions from journalists, Soler clarified that Andalusia and Murcia had supported the reserve of the Covid Fund. Later, Soler openly charged against the Madrid councilor and described as “unheard of” that the representative assured that there are no under-financed autonomies. “There are still autonomies that want to consolidate the discrimination of the five million Valencians and Valencians,” he said. A confrontation between Madrid and Valencia that worsens in an already heated climate after the conference of the president, Ximo Puig, in the capital.

The territorial battle was favorable for the interests of the Botànic regarding the criteria for the distribution of this fund. Question that was for Soler the main fight. Thus, the adjusted population criterion, as occurred in past editions of this state aid to alleviate the consequences of the pandemic, will be the one that the Ministry of Finance will take as a reference for distribution. The discussion, however, was not peaceful. In fact, the population criterion was against other governments that bet on giving priority to the Gross Domestic Product, a criterion that would have harmed the Community. Among the defenders were Madrid, Catalonia, the Balearic Islands, Aragon and La Rioja; while Cantabria, the Canary Islands, Castilla-La Mancha, Murcia or Andalusia supported the Valencian position.

Yesterday’s meeting also served to clarify other key aspects, which will be a complete relief for the accounts of the Generalitat. Montero announced a transfer to the communities for an amount of about 3,900 million euros to compensate for the extra funds that they received on account in 2020 and that they have to return in accordance with current regulations. A kind of shielding of your financing. In addition, deliveries on account will rise 5.6% compared to the previous year. Thus, the Valencian Community will receive about 539 million more until reaching 10,269 million. Regarding the fixing of the deficit at 0.6%, the minister recalled that it is only for reference, since the fiscal rules will continue to be suspended.

On the other hand, Montero will compensate the communities for the income lost as a result of the change in the VAT management system in 2017.

A tip about the model, before the end of the year

Another issue that Soler considered an achievement is that of changing the financing model. The matter was not on the agenda, but the minister, as he had promised, demanded to reactivate the debate. Specifically, it requested a monographic Fiscal and Financial Policy Council on this issue. The minister assured the press that the minister had accepted that this council be held, although he admitted that there is no date. Montero herself, at a press conference, assured that she hopes to be able to present the nuclear reform criteria to the communities before the end of the year


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