The research director of the Valencian Institute of Economic Research (IVIE), Francisco Pérez, calculated the debt that should be forgiven by the Community of Valencia at around 27.5 billion euros, both due to the collective underfinancing as envisaged in the agreement between of the ERC and PSOE, as well as the result of having a “constant” income per inhabitant below the average.
This was expressed during his speech at an event organized by the Platform for Just Finançament organized on the occasion of the anniversary of the 2017 mobilization to demand the change of the model and where a joint declaration was signed.
The event brought together political, social and economic representatives such as the general secretary of the CCOO PV, Ana García; the secretary of UGT PV, Ismael Sáez; the president of CEV, Salvador Navarro; the Secretary of the PPCV Organization, Miguel Bailach; the representative spokesperson of the socialist group, Arcadi España, and the spokesperson of Compromís, Àgueda Micó.
Francisco Pérez explained that the Valencian Community suffers from two types of underfinancing: collective underfinancing obtained from the fall of tax resources in the 2008 crisis, which caused the debt of all the autonomous communities, but also relative underfinancing, “getting our resources below average” since before the recession.
From this perspective, it is calculated that the debt that can be forgiven for the Community of Valencia amounts to 27.5 billion euros. This estimate takes into account the total relative underfinancing of the autonomy due to receiving less funds than the average of the communities (18,000 million euros) and the 50% of the collective underfinancing that all the autonomies suffer during the economic crisis of 2008.
The latter is part of the forgiveness provided by the investiture agreement between the ERC and the PSOE, which mentions a generalization of this negotiated forgiveness and which in the Catalan case is 15,000 euros. Pérez pointed out that what was negotiated with the ERC was a collective underfinancing and that it, in the Valencian case, was initially estimated to be “little less” than 10,000 euros.
“Then there is the relative underfinancing, and the Valencian position is the complete payment for the debt obtained from the relative underfinancing,” added Francisco Pérez.
In any case, the economist emphasized that the forgiveness depends on the formula used and that the calculation should only be made based on the closed data of each budget year.
Asked if he believed that the investiture agreement was good for the Comunitat, he stressed that it would be positive if “all communities are treated equally, considering the source of the problem.” “The agreement is good if there is no withdrawal,” he emphasized after recalling that “there are two types of underfinancing and both must be addressed.”
Regarding the reform of the financial system in the region, the economist insisted that it is “possible”, although it depends on the will of the Government. “It would be positive if all the autonomous communities, as was the case before, return to the State to finance themselves, because that has the component of fiscal and financial discipline. If not, discipline will come at some point, but at unexpected and unwanted ways. And we have lived those experiences,” he explained.
For the economist, the new model should equalize financing by eliminating non-guaranteed funds, increasing the percentage of public resources managed by communities, reviewing the Basque quota and including “commitments of loyalty between administrations,” and other measures. . To review the system, he indicated that the first thing to do is to present the proposal to the Fiscal and Financial Policy Council (CPFF), where a broad consensus is needed, where he appealed to “institutional empathy.”
The Ivie researcher stated that the financing of the Valencian Community is 8% less than half of the common regime communities and that the differences in the regional regime can reach 50%.
Take the “last step”
The general secretary of the CCOO PV emphasized the commitment obtained over the years by social and economic agents and political parties, defending the reform of the Les Corts model, Congress and Senate.
García defended that “now is the time to take that specific step to correct the inequalities experienced by all the citizens of Valencia.” Therefore, he asked to “reject any kind of partisan action” and defend from “consensus” and “unity” that public services “can be provided under equal conditions throughout the Spanish territory.”
A “particular moment” moment
Likewise, the general secretary of the UGT PV, Ismael Sáez, stated that the need to reach agreements for the investiture of the President of the Government, Pedro Sánchez, means “the possibility of solving our debt and those problem of underfinancing closer than nothing. “.
The leader of the union said that “through the simple application of arithmetic” in the agreement reached with the ERC, a recognition of 10,000 million euros of debt was established. Thus, he thinks that “there is a particular moment, and that is why it is good that the platform is alive and takes advantage of this moment to inform the public of its need.”
“Let’s stop being second-class citizens”
For his part, the president of the Valencian Business Confederation (CEV), Salvador Navarro, requested the financing and investments appropriate to the Community, as well as the acquisition of the historic debt of 36,000 million euros to the State.
“That we stop being second or third class citizens and that we become Spanish like any citizen of this country,” he said, where he urged the deputies and senators of Valencia to “be able to defend the interests in this land.”
Unit of action
Among the political representatives, the Secretary of the Organization of the PPCV, Miguel Bailach, defended that “it is time” to change the obsolete financial model, “regardless of who is in Government.” “This is something that we Valencians need,” he recalled, and emphasized that the ‘popular’ “always” demanded equal financing and now they do it within the platform.
On the opposition side, the representative spokesman of the PSPV in Les Corts, the former Minister of Finance Arcadi Spain, called for the unity of the Valencians to obtain financing, “a demand of all Spaniards who believe in equality.” In addition, he pointed out that with the investment agreements signed by the PSOE “a window of opportunity has opened” for reform.
And for Comromís, the Congress representative Àgueda Micó promised to work to have a “Valencian agenda” in the Government, as well as in other institutions, and called on his colleagues in the Cortes Generales to work for it. He also claimed the solidarity of civil society against the “political grievance” of underfinancing.