Tuesday, 21 August 2012

Financial Times says Spanish government will use the crisis to cut back regional authorities

Regions are in deep debt thanks mainly to costs of health, education and social services
MADRID In an article last Thursday, the Financial Times said that the government of Mariano Rajoy wants to take advantage of the financial crisis as a "pragmatic decision" and for "political coverage" to make the national autonomous regions system, which in the FT's opinion the governing PP "detests ideologically." The online edition of the prestigious newspaper says that Rajoy is determined not only to>>>

"shrink" the regions politically but also to create a more "centrist". To do this the central government has been "hinting heavily" to the regional governments, many of which are seeking financial help from Madrid to pay wages and to refinance their debts. This poses a severe Constitutional  predicament in that it would seriously damage the post-Franco agreement that brought the country out of a dark dictatorship into a "vibrant democracy". It would also fan the embers of the independentist claims of the Basque country and Catalonia. Those embers happened precisely because of regional development resulting from what is called an Autonomic State.

It is well known that the regions have enormous costs deriving from their having to pay for the three heaviest items: health care, education and social services, none of which are financed -except in varying minor degrees- by the central government. For political reasons, the tax systems in most of not all regions does not collect enough income to make these costs sustainable. This is particularly so after the real estate bubble burst some three years ago, since when the regions have had to depend on handouts from Madrid. The government is therefore using this fact not only to "impose austerity" on the regions but also to "strip" their authority.

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