Consell will request the Government to transfer about $1,500 million annually to the Valencian Community to offset the underfunding caused by autonomy. The core aim remains reforming the distribution model, but since short-term reform might not happen, Finance Minister Ruth Merino and a panel of financing experts decided at a Thursday meeting to pursue a pragmatic path. They prioritized adding a stabilization fund to the next General State Budget and also discussed debt amnesty and the terms for this discount.
On Thursday, Carlos Mazón’s new Council brought together the council of financing experts for the first time. The gathering took place as the national dialogue on system reform dominated headlines, prompting Merino to ask the experts to refresh and update the reports and data they produced in earlier years. The round of discussions confirmed ongoing concerns about autonomy.
The councilor criticized the Government for delaying a potential agreement on reforming the system, arguing that all regions must reach consensus and insisting on political will to take the first step and present a proposal. Until that happens, Merino stated that Consell would stay focused on its duties and urged experts to attend the next ministry sessions with precise data.
The initial focus will be on securing a balancing fund, an instrument the Valencian Community has pursued in recent years to compensate for the reduced resources caused by financing autonomy. Merinos indicated the requested amount would be around 1.5 billion.
The Treasury chief emphasized that reforming the system is a complex challenge and requires courage because of the difficulty in securing agreement across all regions. He described it as a matter of political will.
Assuring that the request would be considered, Merino stated that after the disappointment of seeing no intention to address system reform, the Valencian Community needs a temporary stabilization fund equal to the average, unless the system is reformed. It should be formalized in official channels in alignment with what is necessary.
Experts advocate forgiveness
Ivies director Francisco Pérez outlined the experts’ position after the meeting. He noted that three issues discussed in the 2017 report remain on the table and now warrant updating: financing system reform, the equalization fund, and debt forgiveness.
Pérez agreed with Merino that the easiest objective to achieve is the balancing fund, but the commission will also work on the other two points.
Neither Merino nor Pérez estimated the exact amount that a reduction might involve for Valencia. The councilor attributed this to the lack of clarity about the Government’s proposed conditions for the reduction negotiated with Catalonia, though it could extend to all autonomies.
But the expert offered more clues. He indicated that not only the effects of income reductions stemming from the 2008 crisis would be considered, but also the underfunding faced by Valencia. In Valencia the discussion would include forgiveness of around 10,000 million euros in relation to the past deficits.
The final component that needed updating was the overall estimate. Pérez said a figure would be announced in the coming weeks, though he had previously suggested as much as 17,000 million euros in a prior forecast. The total potential forgiveness could reach approximately 27,000 million.
Pérez added that a broad consensus among commission members would be sought before any specific number is released, a step he described as essential to ensure that the experts’ conclusions gain support across political groups.
Regardless of the final amount, Vox was not expected to back it. Mazón’s partner in Consell is the only party likely to dissent on this issue, with financing already not a central platform for the party and the vice president having stated that the reduction would be rejected.
On the matter of value, Pérez defended Valencia’s contribution by arguing that there is no moral hazard in such support, because the problem is not extra spending but the mismatch between what is earned and what is needed. The core claim is that Valencia’s debt is driven by revenue shortfalls rather than reckless spending.