autonomous communities are still reclaiming their accounts, although at a slower pace. At the beginning of the crisis were identified as the culprits of runaway public deficits incurred by Spain. The PP Government toughened the law to try to straighten out the accounts of the autonomous community. The situation was so delicate that the markets closed the doors to the communities, which suffered to be financed.
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The Government limits the expenditure to the risk of overshooting the deficit target Five communities raise its ratio of debt despite the improvement of the financing, The Board of andalusia wants to find 1,000 million in the market and leave behind the FLA experts urge the State to cut off the tap of liquidity to the communities The communities will join more money than ever because of funding
To alleviate this situation, the central State launched a lifeline to the regions in the form of loans. The regions no longer had to go to the market to negotiate to dog face with investors because they were more advantageous conditions in the window of the Public Treasury. Thus was created the Fund of Liquidity in Autonomous communities (FLA) and the like, which have been provided since then more than 166.000 million to the autonomous communities.
Nearly a decade after the outbreak of the financial crisis, Moody’s believes that “the strong economic prospects of the country are spearheading a perspective ‘stable’ for the Spanish regions in 2019,” according to a report released Wednesday.
More volume of net debt
The dynamism of the Spanish economy, which will continue to grow in 2019, will boost tax revenue, which will help to balance the regional accounts. “However, it is expected that the Pashacasino stock of debt regional increase,” says Moody s. “The total of the net debt for the regions scored (11 of 17, representing 85% of GDP) by Moody’s will reach around 271.000 million in 2019, as compared to the 263.000 million in 2017,” he adds. However, the debt as a percentage of GDP will be reduced.
DEBT OF THE COMMUNITIES
Source: Moody’s with data from the Ministry of Economy. THE COUNTRY
“The economic growth will improve the operating margins of the regions and drive forward the reductions in the deficit in 2019,” says Marisol Blazquez, an analyst at Moody’s in a note released by the agency. The cycle favorable follow ballooning of the collection and delivery of the financing system is becoming more and more generous. In fact, the autonomous communities will receive more money than ever from this system. “It is expected that tax revenues represent about 75% of the operating revenue in 2019, compared to 66% in 2011”.
Despite the clearance of the budget, financing needs will remain high. Moody’s expects that regions require more than 27,000 million extra to be funded in 2019. Catalonia and the Valencian Community will be the one that most needs to have. The main source of funding will continue to be the Fund’s Liquidity Autonomous (FLA) and the Fund Financial Facility (FFF) in the State. Moody’s expects these funds to inject about 20,000 million to the autonomous communities. Some, such as Madrid, the Basque Country or Andalusia have already returned to the markets and will have more options.
