It still doesn’t rain to everyone’s liking. The rebellion of the mayors led Pedro Sánchez to his first defeat in Congress, that rejected the decree law promoted with the aim of responding to one of the main demands of the municipalities: to be able to spend the nearly 15,000 million euros that they have accumulated in the banks since a law by Cristóbal Montoro prevents them from freely spending their surplus. The proposal of the Ministry of Finance, which consisted of city councils lending those funds to the State in exchange for being able to spend 5,000 million over the next two years, only had the votes of the PSOE and United We Can – after an arduous negotiation that placed the common at yes– and Teruel Existe, who seconded the decree thinking that a satisfactory agreement had been reached for most groups.
The Treasury rectifies and suspends the spending rule to increase the investment capacity of municipalities
The setback has forced the Government to rectify your initial intention not to propose a new decree, a victory for the opposition and for the municipalities, which had led the response against the Executive’s plans. But there the triumph ends, since the new proposal by María Jesús Montero is still insufficient for the majority of parties and council members, since some key elements have disappeared, such as a specific fund for public transport and another more important one, of up to 3,000 million euros, which would be distributed among all municipalities by population, regardless of their financial situation. That was the transfer of the Treasury at the last minute to get the support of En Comú.
“They have punished us without dessert”, ironizes one of the members of the Board of Spokespersons of the Spanish Federation of Municipalities and Provinces (FEMP) in conversation with elDiario.es. The organization held a meeting of its Board of Spokespersons this Monday, in which its president, the socialist Abel Caballero, has promised to contact the Treasury to resume negotiations as soon as possible, this week if possible. If the talks extend beyond 2020, the 2019 surplus will be blocked and some 3,000 million euros will go to swell the other 15,000 million that collect dust in the banks without being able to use them, as dictated by the Budget Stability Law approved by the PP in 2012.
The conflict with local entities threatens to become entrenched after several months of disagreements between the Montero ministry and the mayors, who feel mistreatment by the State as opposed to the communities. During the pandemic, it has been approved to allocate 16,000 million euros to the communities in non-refundable funds. The claim of local entities is that they are allowed to invest at least what they have saved in remnants, since the Stability Law prevents them not only from spending it, but keeping those 15,000 million in banks costs about 70 million in interest. And they have been in that battle since early summer. The FEMP ended up approving the previous Treasury proposal with the support of the votes of the PSOE -in many cases reluctantly-, and thanks to the casting vote of Abel Caballero and the abstention in extremis of the representative of United We Can, the mayor of Rivas Vaciamadrid, Pedro el Cura (IU). But the numbers did not come out in Congress.
Now, the intention of the ministry is to reset the counter to appease the malaise of municipal corporations, including those in the hands of the socialists. Montero has announced that he is reversing himself and that he will propose a new decree that includes some of the issues on which there was consensus: to annul the spending rule for 2020 (the reference rate above which public money cannot be invested) , extend the use of the 2019 surplus for financially sustainable investments already authorized or use the surplus to pay off debts, among others. The minister considers that 85% of the measures of the previous decree are fulfilled and that it will imply an impact of 3,000 million euros for the municipal coffers.
The mayors put duties: unconditional fund, transportation and remnants
However, the victory is partial for the municipalities, as recognized by most parties. The mayors have put duties to the Government, which, in the first instance, they demand to restart a negotiation. Beyond the voices that emerged at the beginning of the debate within the PSOE, the socialist mayors have chosen not to make noise on this matter, although they privately acknowledge that “the most important thing remains.” In fact, the president of the FEMP has asked the Government to include in this new offer the fund to cover the hole that the pandemic has left in public transport – between 270 and 400 million euros – that the Treasury has left out for now. In a meeting with mayors held this Monday, the Minister of Transport, José Luis Ábalos, has promised to address this issue with Montero, which has been in contention since the confinement caused a collapse in public services.
Apart from this requirement, Caballero recognizes that it is necessary to maintain the negotiation on the distribution of the 5,000 million fund, 3,000 of them lost funds, as well as the use of the remnants that local governments have. These two issues are left out by Montero as he did not have the necessary consensus and invites political parties to put an “alternative” on the table.
Demands shared by mayors of all colors
The fight will be precisely on those two issues that all groups with representation in the FEMP demand to negotiate. The PP has celebrated the rectification of the Treasury, but assures that it is “insufficient”. Thus, it demands, in addition to the part corresponding to transport, that an “unconditional fund” of 5,000 million euros be included – similar to what was proposed in the initial decree but that does not oblige local corporations to previously assign their remnants to the State-. “We will not settle for miseries”, has expressed the conservative spokesman in the FEMP and mayor of Zaragoza, Jorge Azcón. Regarding the cancellation of the spending rule, several council members of the PP, such as José Luis Martínez-Almeida from Madrid or José María García Urbano from Estepona, have asked the Executive to extend to 2021 “which will be the year in which that more impact is going to have the crisis generated by the COVID-19 pandemic ”.
But not only the PP maintains the pulse of the Government, but mayors of very different signs coincide on the municipal front. The councilor of Barcelona, Ada Colau, has also claimed a specific fund for municipal corporations. After weeks of tug of war, Hacienda had to negotiate in extremis with government partners to avoid a bankruptcy in the support of the groups that support the coalition. En Comú did not accept the text that came out of the Council of Ministers and Montero ended up yielding so that the 5,000 million did not go only to the municipalities with savings but that 60% of that amount – around 3,000 million – was distributed among the set of local entities according to a population criterion. The mayor of Barcelona now considers that this idea should be part of the future decree.
In the same line they pronounce from IU, where they see the “insufficient” Treasury rectifications. “The Treasury must maintain its proposal to put the aid fund of 5,000 million euros at the service of local corporations and that it reaches all of them, whether they have remnants of treasury or not,” says the head of Municipal Policy, Daniel González Rojas, who claims also the annulment of the spending rule in 2021. The left-wing coalition also suggests that the time has come to end the ‘Montoro law’ that restricts the spending capacity of municipalities.
That is the main “edge” that the negotiation has, according to the representative of the group in the direction of the FEMP, Pedro del Cura: how the formula is managed so that the municipalities can have access to their remnants without making a loan to the State . “All the spokesmen have understood that the decree must be retaken and not bloodied over what happened,” explains Del Cura, who believes that the key is to close an agreement with them: “If there is consensus in the FEMP, the Congress will validates “.
The anger has been transversal in the municipalism and from all the formations they summon Montero to restart the negotiation. “We celebrate that the Government has realized that by negotiating agreements can be reached,” said Compromís deputy Joan Baldoví, who has celebrated the cancellation of the spending rule for this year or the permission to invest the surplus of 2019 , but he has asked for a fund that is distributed according to the population regardless of the financial situation of the consistories and that the formula to spend the remainder be negotiated.