The Ministry of Finance plans to begin, as soon as possible, talks with regional authorities to discuss the government’s aim of partially forgiving the debt accumulated by the autonomous communities during the last financial crisis, between 2007 and 2014. Government sources confirmed that initial contacts will start with Catalonia, Galicia, and Andalusia, in that order, and that conversations will proceed without waiting for the possible formation of a new government in Catalonia, which could take until the end of August.
Officials explained that the sequence of meetings between the Treasury and each autonomous community will follow the customary protocol for these processes. This protocol prioritizes engaging regions with greater competence and earlier achievement of higher transfer levels, before those with smaller transfer volumes or later incorporation into a given competency level.
Since the initial debt relief agreed between political parties will apply only to communities of the ordinary regime —not to the Basque Country or Navarre— meetings will begin with Catalonia and then proceed to Galicia and Andalusia.
According to estatal statistics, after these three communities, those with the highest numbers of decrees transferring powers and services are, in this order, Valencia, Canary Islands, Castile and León, Balearic Islands, Aragon, and Murcia. They are followed by Cantabria, Asturias, Extremadura, Madrid, Castile-La Mancha, and La Rioja.
Meetings in July
The Treasury’s initial plan is to roll out meetings with regional representatives throughout July, even before the usual late-July meeting of the Fiscal and Financial Policy Council. Vice President and Finance Minister Maria Jesus Montero had previously attempted to launch this round of talks in January and again in February. The government is now launching a renewed effort.
The government has not yet disclosed the mathematical formula by which the 15 billion euros of autonomous debt that will be forgiven to Catalonia was calculated. When that formula is published, it may be possible to estimate the amount of debt the state would forgive to each ordinary-regime community. For now, it is known that the 15 billion euros forgiven to Catalonia represent 20% of the Generalitat’s debt to the State through the Autonomous Liquidity Fund (FLA), but officials stressed that this percentage will not serve as a reference for extending the measure to other autonomous communities seeking relief. The text of the PSOE-ERC agreement notes that any extension to other communities will be based on the highest debt burdens incurred during the previous crisis, specifically referencing the surge in liabilities that occurred between 2007 and 2014 when they quadrupled.
The government’s objective is to enshrine debt forgiveness for autonomous communities in a legal instrument, either as a standalone act or within the Budget Law for 2025.
Greater pre-financing allocations from July
For the moment, regions will begin to access higher advance payments under the 2024 autonomous-financing framework in July.
In the royal decree approving urgent economic measures, the update to advance payments for territorial administrations has been included. Specifically, autonomous communities will receive a total of 154.467 billion euros in 2024, a rise of 20 billion compared with the previous year. Local entities will receive 28.557 billion euros, 5.260 billion more.