Seven billion one hundred twenty-eight million euros over the next four years. A specialist report commissioned a month ago by the Ministry of Finance and presented this Wednesday states that this is the extra funding the Valencian Community would need from the regional financing system to match the resources received by other regions. The finding was welcomed by the mixed Consell-Cortes finance commission in parliament and supported by all parties except Vox. The Valencian Administration aimed to use the report as leverage in its negotiations with Madrid, though the Ministry of Finance had not put a formal proposal to a vote yet.
A panel of experts proposes a growing equalization fund in the legislature, contributing an average of 1.782 billion euros to the Valencian Community. The plan would channel extra resources to offset the shortfall under the current model. In the first year, four underfunded regions would benefit: Murcia, Andalusia, Castilla-La Mancha, and Valencia. The leaders of these regions recently reached what was dubbed the “Fitur agreement” to implement this transition mechanism a few days earlier.
In 2024, the Valencian Community would be responsible for 1.183 billion of a total 3.237 billion. The government’s figures closely mirror those in a recent Fedea report. From there on, transfers would be adjusted annually as the average shifts with added funding to the four regions, and some areas might fall below this new average, becoming part of the leveling fund in subsequent years.
Projections show the Generalitat should contribute an extra 1.746 billion in 2025; 2.002 billion in 2026; and 2.196 billion in 2027. Andalusia would likely receive more in absolute terms. Overall, the state would contribute an average of about 6.1 billion more each year, totaling roughly 24.4 billion over the legislative period.
Ivies’ director and de facto leader of the expert panel, Francisco Perez, explained that during this period the regions that have been disadvantaged by the system would steadily approach 99% funding. He noted that existing gaps would narrow (Valencia at about 91.8% of the average, compared to Cantabria, which stood well above the average by about 15 points).
One of the strengths of the proposal is its gradual, progressive approach to equalizing resources. It aims to ease political tensions by building consensus while pushing for reform so that differences between regions lessen over time and no group sits decisively on the losing side.
Perez and the experts did not overlook debt and the potential for forgiveness. The updated research highlighted a high level of liabilities tied to insufficient financing—nearly 80% of the total—amounting to roughly 43 billion out of 55,000 million currently owed.
With this in mind, Perez reiterated that both collective underfunding and relative financing should be evaluated. Regions that have faced structural underfunding by the system deserve consideration, he argued, and he proposed a three-pronged approach that also includes the interest on this debt, estimated at about 6.5 billion. Since much of the debt is tied to the FLA, he contended that shifting ownership from the Generalitat to the central government would not cost the State anything, effectively making it a transfer rather than an expense.
“Consensus” with caveats
Following the meeting, Finance Minister Ruth Merino highlighted broad support for the leveling fund from employers and unions, describing a sense of consensus across political groups and civil society, as Catalan Mazón echoed the remarks of the day before.
Yet a parade of party representatives in front of the media suggested that the harmony was conditional. Compromís’s Ombudsman, Joan Baldoví, urged restraint on photo opportunities and called for action: “Let’s vote.” The coalition plans a parliamentary initiative in the Consell to advance the report to the Cortes and then to Madrid.
One observer remarked that everyone should hold their breath amid the disagreements about debt relief. When asked whether Compromís would move forward if the central government refuses to include equalization funding in the budgets, the party declined to specify its path.
Socialist Toni Gaspar acknowledged the challenge. Minister María Jesús Montero noted a recent agreement on the investment framework with Sumar, but her party still backs the balancing fund and a transition path toward full convergence. The call remains for a fund that would ensure fair treatment across all regions.
The debate kept returning to another transitional instrument: debt relief. Proponents urged leveraging a window of opportunity created by the central government and urged Mazón to act boldly, as Baldoví had, even if that meant opposing parts of the PP on pardons.
Socialists criticized Merino’s attendance without a concrete voting plan and attributed the divisions within the Consell between the PP and Vox to disagreements over the debt settlement and the stabilization fund.
Questions persist about Vox’s cautious statements. After Ombudsman José María Llanos criticized the leveling fund on Monday and councilor José Luis Aguirre defended it on Tuesday, Teresa Ramírez, the Cortes deputy, preferred caution on Wednesday: “We cannot assess the document without a detailed review.” Her aim was to work toward national equality.
Regarding the leveling fund and Aguirre’s defense, he rejected the councilor, arguing that his remarks were not tactful and that the central government must provide the solution.
(Source: Expert report on regional financing reform.)