This Consell’s budget for 2021 focused on post-pandemic recoverya. The Valencian Government chose the iinjection of public money to revive the economy and closing the social wounds left by the pandemic, along with the increase in spending not adequately supported by income because despite the extraordinary increase in State resources, insufficient funding has once again strained the accounts, resulting in a deficit of more than 2,000 million in public coffers.
The Generalitat 2021 General Account Audit Report, published yesterday by Sindicatura de Comptes, shows an increase in the deficit compared to the previous year, from 1,830 million euros to 2,153 million euros. The supervisory body approves, conditioned by additional funding from the State due to covid. In fact, both in 2020 and 2021 the result is negative, but better than 2019, when a deficit of 2.6 billion was reached.
Thus, he explains that this deficit “is not due to expenditures above the regional average, but to incomes below it, among which those coming from the regional financing system stand out.” So the problem is not spending a lot, but the lack of a permanent and stable income. Or to put it in numbers: if expenses already exceed revenues of 1,830 million in 2020; a year later, expenses increased by 1,700 million and revenue increased by 1,400 million, leaving a 300 million more deficit.
The situation is not secondary, but structural. Analysis by the supervisory body goes back to the last four years between 2017 and 2021 to point out that revenue from the regional financing system is “not sufficient to meet the agreed obligations of the respective budgets”. , not even just to cover non-financial expenses that do not involve debt. He even argues that this system’s coverage ratio has fallen in the last four budgets: from 64% in 2017 to 48% in 2021.
However, in his analysis, The SAI warns of “special circumstances” in which activity is carried out in 2020 and 2021., marked by the pandemic and the extraordinary assistance of the State and the European Union. These extraordinary injections, he warns, “risk the deficit to widen again once unconditional additional financing is removed, a deficit that will be difficult to balance with the existing regional financing system, as has been repeatedly pointed out in previous reports.” The situation was complex, but worse without the extra funds. it could be.
Now nothing is free: “The outcome for Generalitat is very different, because the state mechanisms are an increase in debt, while regional financing is received without compensation.”
Arcadi Spain calculates the epidemic bill as 3.011 million
The covid bill in the Community of Valencia rose to 3,011 million euros between 2020 and 2021, of which 1,227.9 corresponds to fiscal 2020 and 1,783.6 to fiscal 2021.
This is one of the conclusions of Finance Minister Arcadi España after learning about the Sindicatura de Comptes report on the Generalitat’s 2021 general account released yesterday. According to Spain, the agency “approves” of Consell’s economic management and “efforts to strengthen public services during covid.”
The Finance Minister regretted that “indebtedness is the only alternative Consell has to ensure the provision of essential services in the face of underfunding” and stressed the urgency of “recovering the historic debt”.
As stated in the statement by Spain, the audit “is a significant increase in budget execution by 1,734 million euros more than in 2020, and Generalitat’s creditors are at least 713 million”.
Source: Informacion
Emma Matthew is a political analyst for “Social Bites”. With a keen understanding of the inner workings of government and a passion for politics, she provides insightful and informative coverage of the latest political developments.