The Government of the Balearic Islands yesterday described as “disregard” the decision of the central government to write off regional debt with an unequal distribution among autonomous communities and without prior negotiation with regional governments – except for Catalonia. In protest, representatives of the Balearic government, along with other regions governed by the Popular Party, walked out of the Fiscal and Financial Policy Council meeting before key points on regional financing were discussed.

The Balearic Minister of Economy, Finance and Innovation, Antoni Costa; the Director-General of the Treasury, Financial Policy and Heritage, Susana Pérez; and the Director-General of Budgets and Finance, Tomeu Alcover, before the Fiscal and Financial Policy Council meeting at the Ministry of Finance. Photo: CAIB.

The Minister of Economy, Finance and Innovation, Antoni Costa, strongly criticised the lack of prior dialogue with the affected regions: “It is absolute disregard. They made the decision in advance in a negotiation with Esquerra Republicana de Catalunya (ERC) so that Sánchez could stay in power.” Costa insisted that the measure represents unfair treatment among regions, pointing out that “the Spanish government plans to approve a debt write-off of more than €2,000 per Catalan, while each Balearic citizen will have just €1,400 written off.”

Change of Creditor

The Balearic government also questioned the real effectiveness of the measure, warning that it does not imply an actual debt cancellation but rather a change of creditor. “It is all a big deception because no debt is truly written off; instead, we will no longer owe it as citizens of the Balearic Islands but will owe it as citizens of Spain,” said Costa.

Furthermore, Costa explained that, according to the Ministry of Finance, the regions will not be allowed to allocate the supposed savings on interest to healthcare, education, or social services. “That is why we insist: what the Balearic Islands need is a new financing system, because the current one has been expired since 2014,” concluded the minister.