Asturias, neither: the Spanish government will only have Catalonia by its side for the new financing
Treasury does not throw in the towel and hopes to seduce another community to obtain at least an abstention
MadridJuly will be a thrilling month for the Ministry of Finance. Not only because it has put underway the machinery to present the 2027 budgets –with the vote on the stability path in Congress and the presentation of the spending ceiling–, but because it will be key to the funding model. After almost two years of negotiation with Esquerra and the Generalitat, this week the ministry plans to send the draft of the new funding system law in writing and July 29th minister Arcadi Spain will make it official in a new meeting of the Council of Fiscal and Financial Policy. And it will be at this meeting that all common-regime autonomies (the Basque Country and Navarre are excluded) will vote against the model, with the exception of Catalonia.
The 'no' vote from the PP-governed communities – almost all of them – was taken for granted from day one. So was the vote from Castilla-La Mancha, led by socialist Emiliano García Page, who is Sánchez's main critic within the PSOE; but the Spanish government did intend to convince Asturias, where fellow socialist Adrián Barbón has been in power since 2019. However, after several bilateral contacts with the Treasury, the Asturian executive confirms to ARA that they will vote against the new model. "Asturias cannot vote in favour of this proposal," they state from the regional government, "it goes against what we have been defending for more than a decade," they conclude. Faced with this stance, the Spanish government appears resigned to being alone with Catalonia, although the ministry has not thrown in the towel and is seeking a vote in favour or at least a last-minute abstention from some community (except for the three socialist ones and the Canary Islands, which has a Canary Coalition president, the rest are governed by the PP).
The Declaration of Santiago
Sources in the Asturian government recall that at the autonomous level, socialists and populars have an agreement on how financing should be reformed since 2020. A pact unimaginable at the state level. Asturias also signed the declaration of Santiago de Compostela in 2021 together with seven other autonomies to establish a consensual position for the financing reform.
They assumed it, in addition to Asturias, Extremadura, Aragon, Castilla-La Mancha and La Rioja (then governed by the PSOE), Castilla y León, Cantabria (governed by the PRC) and Galicia, at that time governed by Alberto Núñez Feijóo, now leader of the national PP. That is to say, communities that have significant depopulation problems – of the so-called "Empty Spain" – and that have common interests in defending what a new financing model must take into account. A position that does not coincide with that of other more populated communities such as Catalonia or the Valencian Community, Andalusia, Madrid and the Balearic Islands.
The declaration had 35 points and went beyond financing, but regarding the model it basically said that all communities should be able to provide similar services "regardless of each one's ability to generate tax revenue". When calculating the slice of the pie that corresponds to each community, the document specifies that population aging should be particularly rewarded – as the cost of healthcare and dependency skyrockets –; geographical dispersion, orography or depopulation. At the same time, they reject any system that may arise from a bilateral agreement, as has happened in this case with the financing agreed between ERC and the Spanish government, and they demand that the system be debated within the framework of the Council of Fiscal and Financial Policy, which is a multilateral body.
The Treasury reminds us that everyone wins
From the Spanish government they recall that with the new model all communities would benefit. They assure that autonomy and solidarity for everyone is guaranteed, as well as an unprecedented extra contribution of resources from the State of up to 20,975 million euros (it has not been detailed where they would come from). However, it is also true that, contrary to what Asturias and the rest of the communities of the Santiago declaration claim, the system agreed with ERC gives more weight to the communities in the participation of tax revenues from VAT and IRPF (read here the keys to the model).
In the ranking by communities, as the ARA advanced, the one that would gain the most resources in the new financing model would be Andalusia (4,846 million euros) and then Catalonia (4,686 million euros) and the Valencian Country (3,669 million), although where the model would especially be balanced is in ordinality, adjusting the relative position of those that contribute the most so that they do not fall in the ranking after the application of the model.
The autonomies of the Santiago declaration, in absolute terms, would gain less, taking into account that they are already over-financed: Asturias, 248 million euros or Galicia, 587 million. Extremadura and Cantabria would remain the same as currently thanks to the so-called statu quo clause, which guarantees that no community receives less than it received with the updates of the system.
The approval at the Council of Fiscal and Financial Policy
Despite the non-majority of the communities, the financing model will go ahead in the Council of Fiscal and Financial Policy, as the Minister of Finance has half the votes and, in addition, the affirmative vote of the Generalitat will be added. However, where the Spanish government will really risk it is in the Congress of Deputies, where the new financing law must obtain the absolute majority of the chamber.
Junts holds the key. So far it has opposed the system because it claims an economic agreement, but it will allow the first debate, the one on the whole, to pass, so that the parliamentary discussion can at least begin. When will it be time to discuss it in Congress? From the Ministry of Finance they do not want to set a date beyond the Financial Policy Council of July 29 –then it must be approved by the Council of Ministers and sent to the Spanish chamber–, but time is running out: there may be Spanish elections from the first quarter of next year and, if the process has not finished, everything could be in vain.