The deputy prime minister and minister of Finance, Maria Jesus Montero, expressed confidence that most autonomous communities would join the government’s proposal for the state to assume part of the debt they accumulated during the previous financial crisis after 2007. She noted the plan as a serious, sensible one that will be shared by the majority of autonomous communities during her appearance before the Senate Finance Committee.
The ruling party governs eleven of the fifteen common-regime autonomous communities. Montero’s statement underscores that most PP-controlled regions are likely to back the debt-relief proposal for autonomous communities, which Madrid’s president Isabel Diaz Ayuso has already opposed.
However, Montero has not yet detailed in the Senate the mechanism the government will use to extend to the remaining common-regime communities the decision to forgive 15 billion euros of debt to Catalonia, a measure agreed with ERC as part of the investiture agreements for Pedro Sanchez’s government. The vice president expressed hope that technical meetings will start soon to finalize this “debt assumption by the state.” Earlier statements placed these meetings in January and then February, now expected to begin in March.
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She stressed that the debt-assumption plan would be based on objective and uniform parameters for all regions. “What are those parameters? They will be known as we work on them,” the deputy prime minister told the senators.
Different analyses from the rating agency S&P Global Ratings estimate the impact of extending the debt-forgiveness decision to the rest of the autonomous communities could range from 49.72 to 71.73 billion euros, depending on the initial assumptions used in the models.
The government intends to have the state bear part of the debt incurred by the autonomous communities during the period from 2007 to 2014. “There was a time when funding for essential services was not adequately provided. The measures implemented under Montoro aimed at tightening the squeeze in an austerity-driven approach,” Montero said. She added that the government now aims for the state to assume the debt Montoro’s policies left to be financed, enabling the autonomous communities to access capital markets again.
Autonomous Financing
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During her appearance before the Finance Commission, Montero reiterated the government’s commitment to reforming autonomous and local financing. She acknowledged the political difficulty of moving the reform forward but emphasized that any change must happen with cross-party consensus. “I want this reform done with the PP,” she said, lamenting that “Mr. Feijóo is not in a position to lead the negotiations across the regions under PP control in this debate.” She stressed that reform should be pursued with broad agreement, above regional considerations, noting that everyone must make concessions for progress to occur.
Budget Plans
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One day after the Senate blocked the government’s deficit and debt targets for the second time, the deputy prime minister reaffirmed the aim to present a state budget proposal for 2024 as soon as possible, once consensus with the majority of political groups is reached.
Ahead of a vote on the budget negotiations with Catalan parties Junts and ERC to advance the amnesty law, Montero commented that discussions are ongoing with groups to enable new accounts for 2024. She described it as a productive way to exercise economic policy and said that talks would continue with updates provided as agreements are reached.
State Attorney’s Office Report
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Montero noted that a report from the State Attorney’s Office—seen by El Periódico de Catalunya, part of the Prensa Ibérica group—supports the government’s ability to pass a budget bill this year despite Senate opposition to deficit and debt targets. A PP senator, Gerardo Camps, questioned how she could claim the existence of such a report when its formal signature appeared later in the day. Montero avoided answering that question, later accusing the PP of doubting the document’s existence, calling it a “phantom report” before new evidence showed it did exist and dated from December 11.