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The Government considers cancelling €17.104 billion debt for Catalonia before 29-N

Sánchez's government explores a decree to cancel €83.252 billion in regional debt, with €17.104 billion for Catalonia.

Leo Salguero
Leo Salguero
· 2 min read

Pedro Sánchez's government is exploring bringing the cancellation of regional debt to the Permanent Deputation via a decree law, with Catalonia as the second beneficiary receiving €17.104 billion. The measure faces legal doubts as it is an organic law.

The Government of Pedro Sánchez is considering rescuing the cancellation of debt to the autonomous communities through a decree law under the argument of "urgent necessity," according to OK Diario. The bill that lapsed in the Congress of Deputies upon the dissolution of the chambers contemplated an impact of €83.252 billion that the Executive would forgive to the autonomous communities, of which €17.104 billion would correspond to Catalonia due to its debt with the Autonomous Liquidity Fund (FLA).

The plan would consist of presenting the regulation to the Permanent Deputation, an organ where the PSOE and its partners have one more vote than the PP and Vox. It is the same mechanism used for the "Maricarmen decree" or the aid to those affected by the DANA in Valencia.

The main hurdle is legal: the original project was an organic law, a figure that cannot be replaced by a decree law. Therefore, the Ministry of Justice, led by Minister Félix Bolaños, is seeking a legal fit for the operation.

The president of the Generalitat, Salvador Illa, the regional baron with the greatest rapport with Sánchez, is pushing to advance economic measures for Catalonia. Sánchez, in turn, seeks to please Illa and sow goodwill in the Catalan territories where he expects to harvest the most votes.

In the planned distribution, Andalusia was the community with the largest allocation, €18.791 billion, followed by Catalonia with €17.104 billion and the Valencian Community with €11.210 billion.

The Community of Madrid, led by Isabel Díaz Ayuso, filed a complaint considering that the measure breaks the principle of equality by rewarding the most indebted autonomous communities. According to calculations by Madrid's technicians, the mutualisation of the debt would entail an additional cost of €483 for each Madrilenian.

For Catalan taxpayers, the cancellation of those €17.104 billion would reduce the burden of the FLA and free up resources in the accounts of the Generalitat. The timeline suggests that the operation would be attempted to be closed before 29 November, the date when the deadline for parliamentary processing expires. Government sources have not yet confirmed whether the legal fit will be ready by that date.

Leo Salguero

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Leo Salguero

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