Catalonia continues to receive a third of state funds to pay bills and debts.

BarcelonaCatalonia continues to receive a third of all the funds the central government has allocated to the autonomous communities since 2012 through extraordinary mechanisms such as the Regional Liquidity Fund (FLA). According to data from the Ministry of Finance, from that year until the allocation for the first quarter of 2026, the total amount for Catalonia, through various extraordinary instruments, has reached €160,722.3 million. This represents 32.8% of the more than €488 billion allocated to the territories under the common regime, which are used to cover the deficit and pay outstanding bills and debts. However, the ranking changes when the estimate is calculated in euros per capita. In this case, the Valencian Community leads the way, with €22,461 per person, given the increase in resources received by this autonomous community to mitigate the effects of the October 2024 storm, compared to €19,676.4 in Catalonia. Two issues currently on the table, agreed upon between the Spanish government and the ERC (Republican Left of Catalonia), directly affect regional finances, despite the polarization and difficulties in securing parliamentary support. One is the forgiveness of approximately €17 billion of Catalonia's FLA (Regional Liquidity Fund) debt, out of a total of more than €83 billion for all the autonomous communities, representing around 24% of the current regional debt. This was approved by the Council of Ministers and is pending ratification by the Congress of Deputies. The other essential element is the new financing model, which faces the challenge of providing specific provisions for Catalonia, but also for the other regions. The upcoming meeting scheduled for this Thursday between the Spanish Prime Minister, Pedro Sánchez, and the leader of Esquerra Republicana, Oriol Junqueras, must implement it and address issues such as maintaining the principle of ordinality; that is, ensuring that once resources are contributed to the common fund, Catalonia does not fall too far behind other territories. According to the settlements of the current financing model, which expired in 2014, Catalonia is the third largest contributor to the system, behind Madrid and the Balearic Islands, but it falls to tenth place when the distribution is based on state spending and investment, and drops even further when the price differential is taken into account.

For the fiscal year that has just begun, the Generalitat (Catalan government) is expected to receive €8.538 billion, of which €1.3512 billion has been allocated for this first quarter. This amount does not come from the FLA (Regional Liquidity Fund) but from the financial facility, which is the other instrument available to autonomous communities that request access to it and that meet the deficit and debt targets. Besides Catalonia, these include Aragon, the Balearic Islands, Cantabria, Castilla-La Mancha, Extremadura, Murcia, and the Valencian Community.

Last year, the Generalitat also received part of a loan from the European Investment Bank (EIB) for a total amount of €430 million, which is being disbursed in installments and should allow it to reduce the amount requested from the central government. The sum that was still coming from the FLA in 2025 reached €8.99111 billion. But the Valencian Community surpassed it, reaching €10,151.84 million, of which €2,364.28 million was exclusively for financing reconstruction after the damage caused by the DANA storm, in addition to another €1,692 million, according to Treasury data.

Closed markets

These volumes of liabilities arose from the need to provide liquidity to the autonomous communities when the markets closed their doors to financing in 2012. In absolute terms, after Catalonia, the second autonomous community that has received the most extraordinary funds for liquidity during the period has been the Valencian Community, with 123,346.4 million; and the third, Andalusia, with 60,472.8 million, 12.37%.

Regarding liquidity instruments since 2012, things change if the calculation of resources received is per capita. Behind the Valencian Community, according to demographic data from the National Institute of Statistics (INE) as of October 1st, is Catalonia, with €19,676.4 per capita, and third is Castilla-La Mancha, with €15,627.9 per person.

These mechanisms, created to mitigate the inability of the autonomous communities to access the markets when the debt crisis erupted in 2012, first under the PP government and then under the PSOE, have resulted in the central government becoming the main financier and creditor of the most indebted autonomous communities. This is the case of the Generalitat of Catalonia, with liabilities of €89.089 billion as of September 30th, and 84.6 out of every €100 owed to the central government.

Dependency until 2036

The Catalan government anticipates that it will be dependent on the central government until 2036. In presentations to investors, it states that debts up to 2016 related to state liquidity instruments have already been settled. Only debts from 2017 onward remain outstanding.

Interest rates on liquidity instruments were very low, reaching an average of 0.109% in 2021. Currently, they exceed 3%, which is why the government of Salvador Illa managed to finance part of the 2023 FLA debt (€3.5 billion) through banks such as CaixaBank, Banco Sabadell, BBVA, and Santander for the first time in 13 years. This is projected to save €127.6 million in financial costs until 2035.

The Catalan government hopes to be able to access the markets in the future, although it has not yet set a date. Through the extraordinary mechanisms allocated to the autonomous communities, the Treasury settled the last of the Catalan government's bond issues, which were intended for individuals and companies, in 2014. This repayment brought an end to the financing cycle through so-called patriotic bonds, which the tripartite government began in 2010.