Diego Martínez, economist: “Andalusian health and education could deteriorate with a Catalan quota”

Diego Martínez López (Jaén, 1973) is a professor of applied economics at the Pablo Olavide University of Seville and a researcher at the Fedea Studies Foundation and author, along with other experts, of a report by the Economic Observatory of Andalusia (OEA). loaded with arguments against the fiscal independence of Catalonia. He was – as he said colloquially – a senior official in the Treasury before being a “brother”. Between 2015 and 2018, he held the General Directorate of Financing and Taxes in Andalusia, and between 2018 and 2020, he was Secretary General of Autonomous and Local Financing in the Ministry of Finance, always with María Jesús Montero at its head. Therefore, there are few voices more authorized than yours to speak about the tax quota that has exploded the debate on the reform of the regional financing system, a subject that has been pending for a decade. — Is the Catalan quota an affront to the rest of the regional financial system? autonomies? — Yes. It would generate a double comparative grievance. First, with the wealthy communities that we find ourselves in a situation similar to that of Catalonia, such as Madrid and the Balearic Islands. And secondly, it is an insult to the less favoured countries such as Andalusia or Castilla-La Mancha, because part of the resources they receive come from the solidarity of the richest. — Why is it not very supportive? — It reproduces a pattern of economic consultation. And the experience we have with systems of this type in the Basque Country and Navarre leads us to think that Catalonia’s contribution to solidarity will be less than what it currently contributes. Otherwise, these bags were not necessary for this trip. A process of fiscal disconnection to continue contributing in the same way would not make much sense. We believe that this path begins with the intention of minimising the contribution to solidarity of the State. — The agreement is reached to place the socialist Salvador Illa as president of the Generalitat of Catalonia. Does everything arise from a political necessity? Historically, reforms of regional financing have begun in Catalonia. The particularity of this agreement is that it results from a specific situation such as the investiture of a regional president and not a national president. That is what is creaking. While in a national negotiation, even with the Catalan parties, the common interest is on the table, here the interests of the PSC and the ERC weigh, which in no way represent those of the rest of the State. The agreements of Aznar or Zapatero with the Catalan parties to reform the financing system were provoked by political pacts at the national level that can be understood in both cases, but here it is not understood as much. — Will the economic agreement for Catalonia cause Andalusia, like other communities, to receive less income in the long term than today? — I am convinced of it. The exit of Catalonia from the common regime would generate an initial surplus of 1,500 million euros, but the hole that it would cause in the state coffers in the medium and long term would be between 25,000 and 30,000 million euros, so the contributions to the autonomous financing would be considerably reduced for all of Spain. — Does this compromise the viability of the country? — Yes. It is still necessary to evaluate what the contribution to solidarity of Catalonia will be. But the simple fact of creating this 30 billion euro hole would already shake the State’s accounts. In a process of fiscal consolidation such as the one we are in and engaged in Europe, this difficult to justify hole would affect the Spanish budgetary situation. “The Catalan economic concert would generate a double comparative grievance with the richest and least favored regions, such as Andalusia” – To whom and how will the 25 billion euros that the Catalan tax quota would cost be paid? – This can only be done in two ways. First, increase taxes and/or issue more debt. In the medium and long term, there may be adjustments in spending, in the form of a lower contribution to regional solidarity through the financing system or another instrument of interpersonal or regional solidarity. In other words, can it lead to cuts in spending on public services? ?—Would this lead to a lower availability of resources in the autonomous communities for social services, education or health.—Could health, education or social policies deteriorate, for example in Andalusia?—That would be the case. It would not happen in the short term, but it would happen in the medium term with a very high probability. — What do you mean when you talk about a complete levelling of regional financing? Does it say that regional financing cannot consist of negotiating a payment from the State without any correspondence from the other party? Does it mean that any autonomous community has the same resources to provide its public services, regardless of the territory in which it resides. The complete levelling would be the sum of the taxes collected by each autonomy and the financial transfers from the State or other wealthier communities. But there is a risk that a community, if it does not obtain enough tax resources, will wait for the money to arrive through transfers. She could sit there and receive a salary from the State. What is not efficient must and can be corrected by a complete levelling. — Regional governments can consider this as an attack on their fiscal autonomy. — That is true, but this fiscal autonomy is not an absolute principle and must be linked to efficiency and solidarity. Andalusian debt forgiveness – The PSOE has also agreed with ERC to cancel Catalonia’s debt to the State. Should Andalusia also negotiate the reduction of its debt? The debt represents around 19% of Andalusian GDP, below the regional average and well below Catalonia. In any case, the Budget Stability Law establishes that the debt amounts to 13% of GDP. Achieving this percentage would require Andalusia to maintain a primary surplus in its accounts for ten years continuously, something we have never achieved. The Andalusian government should defend a sensible and reasonable restructuring, or even a cancellation of the debt. The report of the Economic Observatory of Andalusia also highlights the colour of the Office, since it has increased spending by 13.4% in 2023, while promoting tax cuts that prevent more from being raised. Does this position seem incongruous to you? I have been analysing the evolution of Andalusian tax collection for years and this statement is in no way confirmed that by lowering taxes, more is collected as a result. Collection increases despite tax cuts, but its growth rates in Andalusia are lower than those in other communities. For the Council to demand more financing while giving up on collecting revenue does not seem to me to be a coherent position. — When presenting the OAS study, you said that the increase in spending on health and education does not look good in the Council of Andalusia because it is not reflected in the results. In this case, do you think that what is failing is management? It is not all a matter of investing money, but rather ensuring that what is invested has the best possible performance. In the health area, which is the most visible, waiting lists, surgical interventions, primary care problems, all this has a financial context. But if historical resources are put on the table, it is natural to wonder why it is not working. In the opinion of health economics experts, management tools such as incentives for professionals, the organization of human resources or primary care units are not mobilized. — Were you surprised that Minister María Jesús supported this pact? I will not go into it. I give opinions on facts and data, but from what I have commented, you can imagine that, on this issue, I do not share this support. — Montero, however, did not tire of denouncing the mistreatment of Andalusia when she was Minister of Andalusia. The Treasury and Montoro, from the PP, were in the ministry. You were Director General of Financing and Taxes of the Junta de Andalucía when the Andalusian Parliament agreed to demand 4 billion dollars from the Central Executive for the underfunding deficit of the community. Is the government financially mistreating Andalusia, one of the communities most financed by the current system? — The system financially mistreats Andalusia. This happened with the governments of Zapatero, Rajoy or Pedro Sánchez, that is, it is independent of the one who leads. The law that governs regional financing works automatically. Fortunately, it does not depend on who governs. These are mathematical formulas and algorithms that are precise to the nearest cent and there is no risk of political manipulation.

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