The second in absolute terms and the second in relative terms relative to what has previously accumulated. This is the balance of the Valencian Community’s debt development over the last four years. By the end of 2023, the Generalitat reached liabilities of 57 billion 246 million euros, a financial burden that represents an increase of 6 billion 439 million over the last four years, surpassed only by Catalonia (with 7 billion 314 million) and by 12% compared to the previous year. remained. It was already in second place behind Murcia (18%).
Covid has not only overwhelmed Spain’s hospitals, it has also filled the regional coffers with loans and red figures. Four years into the pandemic, 13 out of 17 communities have had to borrow to cover the increase in costs resulting from the health crisis and the consequences of a slowdown in economic activity.
The suspension of fiscal rules enabled this without any sanctions or deductions. Thus, only the obligations of Asturias, Andalusia, the Balearic Islands and Navarra were seen to decrease during this period. But in the rest, debt increased.
In total, the epidemic’s debt bill was 22 billion 88 million lira, but it did not affect all autonomy equally. In this classification, Catalonia and the Valencian Community stand out by a large margin. Not only are these two communities at the top of the table in absolute terms, but they both represent more than half of all debt generated by these two communities.
In the case of Valencia, 29% of the red numbers bear the seal of Consell, which was then managed by Botànic. Almost a third.
In this debt distribution, it is also noteworthy that the Valencian Community has generated as much revenue as the sum of Madrid, Murcia, Galicia and the Canary Islands in the last four years. These represent the third, fourth, fifth and sixth people with the largest balances in their accounts during this period, totaling twice the Generalitat’s budget.
The Valencian Community has become accustomed to being at the peak of their indebted autonomy. It almost doesn’t matter how it’s measured, whether as a percentage of GDP, as a total number, or as a percentage of the population at the top vying for symbolic medals. It also does so in one of the most affected by per capita finances and is not an independent element.
Nexus with insufficient funding
The absence of government revenue is the rhythm to which debt often dances. Less income leads to greater imbalance if no cuts are made. This relationship can be seen in the example of Murcia. The neighboring autonomous community ranks fourth with the most increased debt, at 1,890 million, and eighth overall. However, Murcia’s debt increased by 18%, which was the highest relative increase in this four-year period, twice as much as Catalonia’s, and 50% more than Valencia’s debt.
The other side of the coin is Andalusia, where autonomy is considered the last financing tool and is one of the few exceptions that has reduced debts in the last four years. 78 million in total, the third country to reduce this the most after the Balearic Islands and Navarra. This island has its own regional concert. However, the Andalusian society continues to be the third society with the most debt globally, with 38 billion.
In the coming months, the debt will be one of the discussions between the central government, more specifically the Ministry of Finance, and the autonomies, and forgiveness of some of it will also be in question. Beyond this reduction, which could be up to 10,000 million in the case of Valencia, Consell also requested that the financing system be addressed, as this would only be a “patch” without changing the distribution model.