Sunday, December 10, 2023

Andalusia will save a little more than Catalonia with debt relief

The agreement reached by the PSOE with the ERC to achieve the investiture of Pedro Sánchez includes the forgiveness of 20% of the debt contracted by the autonomous communities of the state through the Autonomous Liquidity Fund (FLA). As explained by the Minister of the Presidency, Félix Bolaños, this measure is extended to other communities, although the most benefited are those with large debts. Andalusia is in another extreme, containing debt, so it could benefit from a bit of forgiveness.

The president of the board, Juanma Moreno, indicated this Thursday that Andalusia will not ask for this apology, based on a percentage, but an amount equal to Catalonia. According to their calculations, the community will receive 17.8 billion euros.

The figure for Andalusia is not yet certain, as it is not exactly 20% of the FLA, but other factors are taken into account. The text of the agreement explains that “this objective was determined by observing the impact of debt on the negative impact of the economic cycle of the previous financial crisis and the subsequent debt crisis that led to the deterioration of regional public stories.”

The FLA is a mechanism created by the government of Mariano Rajoy in 2012 to help autonomous communities since the financial crisis made it impossible to finance themselves in the markets. The state lends money to the autonomies in exchange for a cheaper interest rate and has an obligation to repay. Catalonia owes the FLA a total of 73,110 million euros, of which 15,000 million euros will be forgiven.

For the citizen, the measure does not have much effect because the debt passes from the community to the central government, even if the autonomies save the annual interest they pay. In the case of Catalonia, it pays 1.3 billion euros per year in interest.

Andalusia owes the FLA 25,270 million euros. The total debt of the Board is 38,018 million euros, measured on June 30. This is 20.2% of GDP, making it one of the smallest debt communities. It is 11.7% of the total debt of all the autonomies, while the weight of its population is 17.8%.

World Nation News Desk
World Nation News Desk
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