The Canary Islands government, business owners, and unions have agreed this Tuesday on a common front to demand that the State allow the Canary Islands to make the spending rule more flexible and allocate the extra funds to strengthen its budget for next year.
This was agreed upon by the President's Advisory Council, which was urgently convened to discuss the proposal that the Ministry of Finance put on the table last week at the Fiscal and Financial Policy Council (CPFF).
During the meeting, Clavijo informed the representatives of the main business and union organizations of the archipelago about the damage that the distribution formula for advance payments for 2024 approved by the Council of Ministers will cause to the Canary Islands, since it "penalizes compliant autonomous communities such as the Canary Islands, which will not be able to allocate the extra 340 million euros to their essential services."
Looking ahead to the negotiation with the State, he thanked business owners and unions for their support, because “we will have more chances of success if we demonstrate unity.” In this sense, both the president and the vice president, Manuel Domínguez, have called on all parliamentary groups to join this common front. “The Canary Islands must have a strong voice before Madrid to claim what is fair and what corresponds to us,” they indicated.
The Government has informed the Advisory Council that the application of the spending rule imposed by the State prohibits the Autonomous Community from allocating the almost 340 million euros that it will receive next year above what was budgeted to additional expenses or a reduction in income. This rule obliges the extra resources to be used entirely to reduce the level of public debt.
It was approved by the Council of Ministers on Tuesday of last week despite the rejection of the vast majority of the autonomous communities, including the Canary Islands, which voted against the Treasury's proposal in the CPFF.
Compliant community
The President's Advisory Council considers that the “one-size-fits-all” approach imposed by the State with the strict application of the spending rule is especially unfair to the Canary Islands, one of the communities that is “most compliant” with public spending control regulations, as business and union representatives stressed after the meeting.
In fact, with data from the third quarter of this year, the debt of the Canary Islands amounts to 13.2% of its GDP, almost nine points below the average of the communities (22.3) and just a few tenths of the three with the lowest level of debt in the country (Navarra 13.1%, Madrid 13% and Basque Country 12.7%). The archipelago is also the Spanish region with the lowest debt per capita: 3,070 compared to the 6,776 euros that is the average for the communities.
In view of these data, the autonomous government has asked the Minister of Finance, María Jesús Montero, to make her position more flexible and allow “compliant” autonomous communities such as the Canary Islands to have an exception in the application of the spending rule. Government, business owners and unions agree that “with the needs we have in unemployment, Education, Health or Social Affairs, we cannot allocate the extra money to pay off debt.”
The President's Advisory Council has also supported the position of the autonomous Executive in view of the negotiation of the forgiveness of debt to the communities. Business owners and unions support the Government in that the reduction be applied “on the basis of the principle of equity”, so that the Canary Islands benefit “as much as the other communities.”
Likewise, economic and social agents agree with President Clavijo that the forgiveness of debt must be accompanied by a reform of the Autonomous Financing System “that resolves the defects detected in the current model” and that respects the singularities of the Canary Islands, leaving out the resources of the Economic and Fiscal Regime (REF) and attending to the adjusted population criterion.
