The debt and the duties

Catalonia lives with a large debt and pending tasks. The first, which exceeds 90 billion euros, means that every Catalan, at birth, is burdened with a liability of 10,999 euros, according to current census data, which exceeds 8.2 million people. The second is the obligation to reform a regional financing system that has been expired for more than a decade, cumbersome and complex, which causes the communities that contribute the most to end up below those that receive the most once the resources of the system are distributed.

Whether the enormous mortgage of more than 90 billion euros is due to mismanagement, that is, to stretching the arm more than the sleeve, or if there is a part that is due to underfunding, which also affects communities such as the Balearic Islands or the Community of Madrid and a large part of the Mediterranean arc, was clarified by the Court of Auditors. In a report used by the Generalitat, this body calculated that more than 33 billion euros of debt between 2002 and 2022 were a consequence of the insufficiency of the system.

The instruments available since 2012 to provide liquidity to the territories are an example of the need to build a more robust system. In 14 years, the State has contributed, through instruments such as the FLA, more than 500 billion euros, of which more than 170 billion have gone to Catalonia. But it has not been money for free, but credit and, on many occasions, with interest rates so high that they have led the Catalan government to refinance a part of the most expensive debt – for example, that of 2023–. And also to place a small part of new long-term debt among private banks, willing to lend money at a lower cost than the State.

To resolve these issues, there are some tools on the table. One is the partial forgiveness of the debt from the Autonomous Liquidity Fund (FLA), for an amount of more than 83 billion, of which more than 17 billion correspond to Catalonia. This measure, which can alleviate territorial financial costs, has a chance of moving forward in Congress, unless the political situation worsens further.

The other way to resolve the problem is quite more complex. Currently, a new model of autonomous financing is on the table which, as on previous occasions, has emerged from Catalonia. The current political atmosphere, unbreathable and in total electoral mode, makes it difficult to achieve a reform. The problem is that not only the PP communities oppose the formula, but also one of those that could join it, Asturias, in the hands of the PSOE, is leaning towards no.

We are facing more of a political battle than an interest in resolving the financing of the autonomies, which is an issue that both sides admit should be resolved. The paradox is that an initiative that everyone considers necessary is being prevented from even being discussed, even though the ideal scenario would be for it to be processed and, during the process, for all parties to bring to debate those points they consider necessary to reach a formula with the maximum consensus. But for that, parties would need to be willing to isolate this fundamental issue from partisan noise.