The Canarian vice-president and Minister of Finance, Budgets and European Affairs, Román Rodríguez, defends the need to open a reflection on the future of the Economic and Fiscal Regime (REF), in view of the consequences that the last two major economic crises have had in the Canary Islands and in order to guarantee the effectiveness of all its tools also in the event of a recession.
One of the formulas that could be articulated, Rodríguez specifies, would be to link all the incentives of the Regime to the creation of employment, "since this is, without a doubt, our biggest problem".
Rodríguez explained in a parliamentary appearance that the current design of the REF is more designed for environments of economic growth, in which it displays all its strength, than for periods of crisis, in which it loses strength, although some instruments, such as the ZEC, have had their best year in 2021.
The vice-president considers that it will be necessary to reflect on this and study how the REF can also become a powerful social and economic shield, which alleviates the serious consequences that economic crises have for the Canary Islands, given its high external dependence.
In any case, the vice-president defends the full validity of the REF measures, both in their fiscal aspects -revised in 2014- and in the economic aspects -updated in 2018- and the fulfillment of its precepts in the State Budgets of 2021 and 2022.
However, Rodríguez indicates that there are some issues that should be retouched, in agreement with what has also been requested from various citizen organizations and with the opinion of the Parliament of the Canary Islands itself. Among them, he cites the claim to extend the deadline for the materialization of the RIC of 2017 to this same year; the change of the IGIC Law, which allows the payment to the companies affected by the bankruptcy of the tourist operator Thomas Cook or the guarantee of triangular trade for companies based in the ZEC.
The vice-president insists, in relation to the RIC, that there has been no breach by the State, but what is being negotiated is a request to extend the deadline for materialization, "something that we will continue to demand from the Ministry of Finance, because we believe that there are solid arguments for it, given the impact of the crisis and the volcanic eruption"
"Let's value the things we have conquered and now prepare the REF to respond to the needs of the Canarians also in times of crisis," said Rodríguez, who added that the Government is working with the economic and social sectors of the Islands to articulate proposals for the future.
Some proposals that will also have to be aligned is the so-called 2030 Agenda, so that the objectives linked to sustainability are incentivized.
Regional financing
The vice-president reiterated, in another appearance, the demands of the Government of the Canary Islands for the inclusion of poverty and the strengthening of insularity within the criterion of adjusted population for the distribution of regional financing. Similarly, he was forceful in defending the disconnection of these resources from those of the REF.
Rodríguez recalled that the adjusted population is the parameter used to measure the spending needs of the autonomous communities, one of the elements of the financing system pending reform and that the Canary Islands responded on January 31 to the report of the working group on this criterion sent on December 3 by the central government.
The document sent by the Government of the Canary Islands complements some of the considerations already sent previously to the Ministry itself -on May 21 and September 22, 2021- and has been prepared under a collaboration agreement between the Ministry and the University of Las Palmas de Gran Canaria with the participation, on behalf of the Treasury, of Lucrecia Apolinario Hidalgo and María Teresa Gil Doreste, and of the higher academic center, of Arturo Melián González.
The Canarian proposal argues, in relation to fundamental public services (education, health and social services), that poverty translates into a greater need for spending and that, therefore, it is necessary to correctly transfer this circumstance to the adjusted population formula. Autonomous communities with lower income levels, he says, have greater pressure on public services.
The Canarian Government considers that the most reliable indicator in this area is the AROPE, "a more accepted multidimensional indicator, which allows its quantification without neglecting the unemployment component ("low intensity in employment")", although also considering severe material deprivation and the risk of poverty (household with an income below the poverty line). This rate, as it comes from official sources (Eurostat and INE), has guaranteed its continuity, annual periodicity, and its improvement, while allowing homogeneity and comparability between autonomous communities and EU countries".
In relation to insularity, it is stated that neither its weighting nor the portion corresponding to the Canary Islands can suffer a decrease with the reform, given that it is clearly underrepresented in the document sent from the central government. Hence, it is claimed that the participation of the Canary Islands in the adjusted population through insularity is increased, given that the contribution of this variable is significantly lower than the costs of public services provided by the Autonomous Community.
