Why does Ayuso not want her debt forgiven?

MadridIf we look at the newspaper archives, we can easily find how some regional presidents of the PP had shown themselves in favour of debt forgiveness. This is not the case of Isabel Díaz Ayuso, who maintains the same firm opposition as always to the proposal that has led the Spanish government to the fiscal and financial policy council this Wednesday. Although the main motivation of the Madrid president is political and is part of her particular battle against Pedro Sánchez, she also has economic reasons. Madrid, which is not covered by the regional liquidity fund (FLA), is one of the communities that least needs the measure. In a press conference prior to the meeting, the Madrid Minister of Economy and Finance, Rocío Albert, argued that the community presided over by Ayuso is "the least indebted of those under the common regime" with only 12% of debt on GDP - excluding the Canary Islands, which within the common regime have a special regime. "We are an example for the rest of the communities, and that is why we finance ourselves in the market," Albert stressed.

On the other hand, those with the highest debt in relation to their GDP are the Valencian Community, around 40%, followed by Catalonia, with approximately 30%, which is a ratio very similar to that of Murcia and Castilla-La Mancha. In absolute terms, the government headed by Salvador Illa is the one with the highest debt (89,000 million, of which 77,000 are with the State). The Government has not taken long to reproach the Madrid president for the criticism of the forgiveness, which it sees as a sign of "deep lack of solidarity" with the rest of the autonomous communities, some of which are from the PP, which need the measure more. The complaint is not new and Isla extends it to other issues such as the downward fiscal race promoted by the Popular government and the opposition to singular financing.

Will the people of Madrid lose out? The PP in Madrid denounces that the debt that the State will keep from the autonomous communities will end up being assumed by "all Spaniards and, therefore, residents of Fuenlabrada, Móstoles or Alcorcón will have to pay that rent for Moncloa that Sánchez is charging so dearly." Indeed, the debt that will be forgiven will not disappear, but will change hands in Spain. The move lightens the burden on the autonomous governments to the detriment of the central administration. This implies that, with the exception of the Basque Country and Navarre, which have their own regime, the rest of the State's taxpayers will assume debts only from one territory. Madrid loses "by a lot," concludes the economist Germà Bel.

In a conversation with this newspaper, Bel explains that Madrid is the community with the biggest difference between the percentage of the total debt forgiven, 10.4%, and the contribution it makes to Spanish GDP, which is around 20%. "It is the one that loses the most," she notes, because the contribution it will make to paying off the debt will be the largest in relation to the percentage that is drained. On the other hand, Catalonia "loses marginally," and will be only slightly below what it contributes, and others such as Andalusia, which has the highest debt forgiveness figure, come out "winning." Ayuso's government has calculated that each Madrid resident will owe 483 euros more than they would without forgiveness.

"This is a bad approach. It is not true," replies the professor of economics at the University of Valencia, Angeles Pla, to questions from ARA. Pla explains that the people of Madrid will not have to assume any additional burden because the central administration will stop receiving money that the FLA autonomous communities should have been paying over the long term. Although it will have less money to spend on the Spanish people as a whole, "the debt of the people of Madrid will not increase" but, on the contrary, they will have to pay less for the 8.644 million euros that they are offered to forgive, he points out. What does happen is that the savings per inhabitant figure in other territories, such as Catalonia, is higher. "They complain because of ideology," says Pla, who explains that "the conservatives" attribute a higher debt to poor management when it can be explained by the commitment to invest in the welfare state or by underfunding.

For his part, Bel points out that Madrid only loses out with this forgiveness. In any case, if other factors are taken into account, such as the underfunding of other autonomous regions and the weight of state spending in Madrid due to the capital effect, the victim narrative falls apart. In any case, Ayuso is already preparing the ground to complain about this specific grievance and the Madrid PP has announced that it will promote a study commission in the Madrid Assembly to address "in detail and with rigor" the consequences of the debt forgiveness and also of the singular financing of Catalonia for the people of Madrid. Albert insisted that Sánchez "wants the people of Madrid to pay for the excesses of the independentists" and denounced that "he cannot stand that Madrid is prosperous."

Ayuso seems willing to go to the last consequences against the debt forgiveness proposed by the Spanish government after the agreement with ERC and has even hinted at the possibility of filing an appeal once the Madrid legal services have studied it. However, this position will be more difficult to maintain in other autonomous regions governed by the PP, which have a more precarious financial situation. Despite the joint protest at the CPFF this afternoon To demonstrate their opposition, some have already opened the door to joining it once it has been approved by Congress.