The Generalitat Claims It Cannot Return to Market Financing Until the System is Reformed

The Minister of Finance and Economy, Ruth Merino, has stated that the Generalitat will not be able to return to financial markets until the regional financing system is reformed. She lamented that the Valencian Community has "closed access," not because it does not want to, but because with its current level of debt, "it will not be possible to regain ordinary access to financing under equitable conditions."

Merino participated in the opening of the colloquium organised for the 35th anniversary of the Foundation for Stock Market and Financial Studies, where she denounced that the Generalitat "has been suffering from chronic underfunding for more than twenty years, caused by a regional financing system that systematically allocates fewer resources per adjusted inhabitant than the national average," according to a statement from the regional administration.

Therefore, she indicated that although the Government proposes a "partial debt forgiveness as a solution," as currently planned, "it would not be sufficient" to allow the Generalitat access to markets unless it is preceded by financing reform. "In a few years, we would be back in exactly the same situation. It is an accounting relief that does not solve the underlying problem," she warned.

The head of Valencian finances emphasised that 79 percent of the Community's debt, more than 46 billion euros, is "directly due to this underfunding and its financial costs," and assured that the savings in interest "cannot be reinvested to strengthen public services."

According to the Minister of Finance, "the real solution lies in ensuring that all autonomous communities receive the necessary resources to exercise their competencies on equal terms." Therefore, she called for "a comprehensive reform of the regional financing system to finally correct the inequality we have been dragging for decades."

Finally, Merino defended that the Regional Liquidity Fund (FLA) is currently "an essential instrument," but warned: "We cannot resign ourselves to permanently depend on it or remain anchored in extraordinary mechanisms that do not offer lasting solutions."