Funding: a modest profit

There is a period of mourning following the ambition for independence, first scaled back to the ambition of a special economic agreement in the Basque Country, then to that of a unique financing model, and finally to a reform of the financing model with some unique features. Add to this the explosion of anti-Catalan sentiment throughout Spain against the perceived outcome of a Catalan demand, assuming it would harm them simply because it is Catalan, and suggesting that if the new model were to go ahead, a new PP-Vox government would immediately suspend it—as the "healthy" one has already stated—and continue with the current model. We overcome this mourning and try to coldly analyze the available data, acknowledging that it is still very limited.

What strikes me? First, although it doesn't deviate from the common system of regional financing, the changes compared to the previous model are significant. Significant enough to make it difficult to adequately predict the effects it may produce. For now, I'll settle for the figures presented by the minister. I would summarize them in this ranking of the projected increase in funding in euros per capita (actual population in 2025 according to the latest INE data) by autonomous community under the common regime: 1) Murcia, 749; 2) Valencian Community, 676; 3) Castile-La Mancha, 587; 4) Catalonia, 577; 5) Andalusia, 558; 6) Aragon, 461; 7) Madrid, 359; 8) Balearic Islands, 330; 9) Canary Islands, 270; 10) Asturias, 244; 11) Galicia, 216; 12) Castile and León, 113; 13) La Rioja, 76; 14) Cantabria and Extremadura, 0.

As can be seen, the winning autonomous community would be Murcia, followed by the Valencian Community, clearly ahead of the others. For many years—since the current model has been in place—these two autonomous communities have been the most mistreated: despite being below average in resource allocation, they lose out in the redistribution process. I don't understand why the national governments haven't wanted to correct this obvious distortion sooner, a distortion that regional governments of diverse political persuasions complained bitterly about to central governments of the same political leaning. It's also immediately clear that the last two autonomous communities on the list won't see an increase in resources because they are so well treated that their overfunding is unjustifiable in a model based on principles of equality and solidarity. These corrections are complemented by the very favorable treatment given to Castile-La Mancha and Andalusia, the third and fifth best treated, respectively. It's not that they were mistreated; the current model simply left them at the bottom of the list in terms of resource allocation. This improvement in the model's fairness, which halves the gap between the best-funded and worst-funded autonomous communities, should have sparked a wave of congratulations from the most pro-Spanish sectors, which clamor for "equal treatment for all citizens"—equal treatment that, obviously, excludes Catalonia. Catalonia is the fourth region to see improvement. This isn't much after all the demands made by the majority of the Catalan political spectrum since the early 21st century. It's worth noting that, in terms of adjusted population, Catalonia moves from ninth to third in per capita regional funding, placing it where it belongs based on its resource contributions to the system. It should be said, as those involved in the negotiations have already made clear, that according to the "actual population" criterion, the improvement is much more modest—from tenth to ninth among the regions under the common regime. The improvement that citizens will see is this: the improvement in actual population, not the adjusted population. The adjusted population is the formula used to explain this result, and it depends on multiple pressures and resistances. It may have legal force for the purposes of resource allocation, but it lacks it in the eyes of any minimally objective observer. Furthermore, if we remember that the euros to be distributed have very different purchasing power among autonomous communities, and that in Catalonia it is lower than the national average, the gain, in real terms, is modest.

Are all these limitations enough to reject the model? It depends on whether there is a reasonable expectation of improvement and whether that improvement can withstand a change in government. In 2009, the new financing model started off quite well, but its design, born of the pre-Great Recession euphoria, had not accounted for the impact of the crisis and left us with sixteen years of frustrating results, while the autonomous communities that complained, just as they do now, obtained guarantees similar to those ofstatus quo which are now being offered to them, and which were excellent protection against the ravages of the crisis. As we see the model now, it's impossible to know if this can be replicated, but it should be carefully evaluated. In the meantime, we don't underestimate what can be achieved.