The cancellation of €17.104 billion in FLA debt is one of the five economic commitments included in the agreement for Pedro Sánchez's investiture between ERC and the PSOE (Spanish Socialist Workers' Party) in November 2023. The other four are: the transfer of the commuter rail network, with the necessary resources to improve this key infrastructure; a permanent fund of €150 million annually for scientific research projects in Catalonia; a €1.6 billion allocation until 2030 to expand the Mossos d'Esquadra force and create new judicial bodies; and the creation of a consortium to guarantee the execution of state investments in Catalonia.
Despite the delays and partial fulfillment, progress is being made on these economic agreements, which have a direct impact on citizens and contribute to strengthening the self-governance of the Generalitat. Regarding the settlement of the FLA, several reflections have been raised, to which I would like to add the following data and assessments:
1. The fact that the Generalitat no longer holds €17.1 billion in debt will immediately improve its solvency metrics. This is no small matter, since ensuring sound financial solvency—that is, the ability to meet payments to suppliers and creditors—is a fundamental objective in the financial management of any institution or company.
The main financier of the Generalitat, apart from the FLA, is the European Investment Bank (EIB). Although this has not always been the case, notable transactions signed in recent years to finance investments in water infrastructure, social housing, and research have consolidated the EIB's position as the main creditor. An improvement in solvency and credit quality will allow the Generalitat to access more advantageous financing conditions, both in terms of price and terms, also with the EIB. Furthermore, the cancellation of the debt strengthens its position to return to the markets and improves its rating from the Catalan Institute of Finance (ICF).
2. The interest savings from the cancellation have been estimated at approximately €250 million annually, and the total savings are approximately €1.5 billion. Although this may seem like a small figure compared to the Generalitat's budget, €250 million annually, if properly managed, can have a significant impact—for example, it represents half of the Culture budget.
Furthermore, the interest savings are not limited to that amount. Lower debt and improved solvency will allow access to more advantageous financing terms for the €29 billion in non-FLA debt.
3. The reduction in state revenue, due to the decrease in interest payments from Catalonia and other autonomous communities, will have to be absorbed by the central government budget. This budget has grown more than twice as fast as that of the autonomous communities in the last decade, indicating that it has sufficient margin to meet this adjustment.
This means that the State will not be able to reduce (and will have to be vigilant) the transfers established by the financing model for Catalonia and other autonomous communities, nor will it affect investments, which should continue to grow at a rate at least similar to that of recent years if the economy remains stable. Ultimately, this measure means greater resources for regional powers, many of which are linked to the welfare state.
4. There has been much debate about which autonomous communities benefit most or least from this debt settlement or mutualization. A good way to analyze this is through the debt forgiveness per inhabitant (based on actual, not adjusted, population), which averages €1,885 across the state.
Using this reference, we can identify the regions with higher or lower than average debt relief per capita. Five regions are above average: Castilla-La Mancha (€2,358 per inhabitant), Catalonia (€2,228), Andalusia (€2,223), Murcia (€2,215), and Valencia (€2,213). At the other extreme, Madrid is the region with the lowest debt relief, with €1,303 per inhabitant.
Overall, this measure will provide some budgetary relief to the Generalitat (Catalan government), but it represents only a small correction within a large accumulation of grievances. However, it is a positive correction for Catalonia. Or do we prefer to continue holding €17.1 billion in debt, continue paying more than €200 million annually to the state for decades, have worse financing conditions with other creditors, and little room to structure new investments in the future?
From here on, all efforts and pressure should be focused on implementing the agreement for fair and unique financing. Remember that the commitment is for the ATC to assume management of the Personal Income Tax campaign next year. Every week until the end of the year will be crucial, with these first months being decisive for designing an appropriate work plan and ensuring compliance with highly complex technical and legislative milestones. Specifically, progress should be made in three areas in parallel: conceptual, regulatory, and operational. It would be ideal to be able to publish a timeline to ensure proper follow-up.
