Each Catalan loses €260 in distribution of regional funds

Catalan finance minister insists current model causes "underfunding" of the Generalitat

2 min
The Minister of Economy, Jaume Giró, in the Parliament, in an archive image.

BarcelonaCatalonia was the second region that contributed the most to the regional financing system in 2020, but, on the other hand, it was only the tenth in income received, according to data published by the Generalitat's Department of Economy this Thursday. This repeats the usual pattern of recent years in terms of the distribution of resources through the regional funding model.

According to the data, Catalonia contributed €2,779 per capita to the financing system two years ago, 17% more than the state average, which was €2,374 per capita. Only Madrid, with €3,347 per capita, contributed more resources. However, once the various distribution methods were applied, the Generalitat's income fell to €2,519 per capita, 1.5% below the average amount of money received by the different regional governments, which was €2,558 per inhabitant. Thus, if we calculate how much each Catalan contributed and how much each Catalan received, the conclusion is that each citizen lost €260. Compared to the averages between all regional governments, however, Catalonia received €39 per person less, despite having contributed €405 per person more.

In a statement, Catalan finance minister Jaume Giró insisted the data "once again highlights" the "arbitrary distribution of resources between regions" as a result of the current financing system. "While Catalonia always loses between 7 and 8 positions [in the table between resources contributed and received]], other regions with a tax capacity well below the average systematically receive more resources per inhabitant than Catalonia does," he lamented.

Giró has once again denounced "the historical underfunding of Catalonia" that causes millions of euros "Catalonia generates every year" to "evaporate" and limits the resources the Generalitat receives once the settlement is closed.

No negotiation for the reform

Despite the minister's complaints, however, Catalonia is not the most affected region by the system. This situation does occur in other aspects of the public accounts, such as for example State investments –especially in infrastructures–, in which Catalonia usually has much lower execution figures than all other regions. This explains why the Generalitat does not consider the reform of the financing system a priority right now, but, on the contrary, maintains a much tougher discourse against the Spanish government in terms of investments.

In fact, last February Giró himself rejected outright a first proposal from the Ministry of Finance to reform the system, adding that he was not negotiating with Pedro Sánchez's administration.

The Valencian government, however, is interested in remaking the system. The executive presided over by the socialist Ximo Puig is one of the most disadvantaged, since despite being only the ninth region in revenue per capita, it is fifteenth out of fifteen in terms of funds received per capita. Murcia is in a similar situation, (11th in funds contributed, 13th in funds received) as is Andalusia (13th in funds contributed, 14 in funds received). Puig has been, for years, the main promoter of the reform of the current model, but he has never had the Catalan government's backing, neither during the years of the Independence bid nor afterwards.

The financing model affects fifteen of the seventeen autonomous regions, since Navarre and the three provincial councils of the Basque Country are guaranteed their own foral financing system, so that they do not participate in the system's common fund.