The Treasury puts an end to half a year of financial strangulation for regional governments and municipalities and will release the 13 billion euros it owes them.

The president of the Valencian Regional Government, Carlos Mazón, sounded the alarm just over a week ago. "If the Spanish government does not immediately activate the Extraordinary Liquidity Fund, the fundamental basic services of the Valencian Community will not be able to be provided in the coming weeks." After five months of eking out a living on the same state transfers from 2023, receiving €165 million less per month than what they were entitled to according to the funding the Treasury had promised them a year earlier, and with an unprecedented catastrophe to mitigate, the accounts of the Valencian Regional Government had reached their limit.

The situation was so serious that even Treasury officials from autonomous communities governed by the ruling party applied pressure to resolve the situation. This Monday, First Vice President of the Government and Minister of Finance, María Jesús Montero, finally announced that she will bring to the Council of Ministers this Tuesday the update on the advance payments to autonomous communities and municipalities that are due according to their respective financing systems.

In the meantime, the Treasury has been left with around €13 billion in cash that should have been in the coffers of the autonomous communities and local authorities. Montero attributed this distortion on Monday to the refusal of the People's Party (PP), among other political parties, to support the December omnibus decree, in which the Executive decided to include this issue along with many others, which ultimately fell through due to a lack of sufficient parliamentary support. "We hope that this time the Government will only take these advance payments into account and not take advantage of the situation to include other issues on its political agenda," warned Ruth Merino, Minister of Finance of the Valencian Community.

It's not that autonomous communities and city councils haven't received the funding that the Treasury advanced them in July 2024 to provide them with a guide for designing their budgets for this year; it's that they aren't even receiving the same resources as last year. With the lapse of the update provided for in the omnibus decree, the reference for these payments has shifted to the 2023 Budget Law, and the financial loss for autonomous communities under the common system is close to €1.8 billion per month. For city councils, it exceeds €500 million per month.

First Vice President and Minister of Finance, María Jesús Montero , announced this Monday that the Council of Ministers plans to approve a decree law tomorrow to update the funds received by autonomous communities and municipalities as advance payments.

Montero, in statements to RNE reported by Europa Press, stated that this decree-law received a vote against from the PP, although he later "reprimanded the Government for not having approved it, also at the Conference of Presidents." This measure is part of the infamous omnibus decree , presented at the end of January by the Government and which included, among other measures, the revaluation of pensions , discounts for public transport, and, on the other hand, the transfer of a Parisian property to the Basque Nationalist Party (PNV) under the Law of Democratic Memory.

"We're going to bring it up again to see if the PP changes its mind now and gives oxygen to the autonomous communities and municipalities that need these resources and that, even though they are of the PP's political persuasion, simply because they tried to cause a parliamentary defeat, didn't see the light," Montero stressed.

In this context, the First Vice President argued that "there are more than enough reasons" for the Government to complete the entire government program announced by President Pedro Sánchez during his investiture during this term. These statements come at the heart of a very serious crisis for the PSOE, the latest episode of which has been led by the party's former Secretary of Organization, Santos Cerdán , who will voluntarily testify before the Supreme Court on June 25 due to his privileged status, as the judge observed evidence of bribery and criminal organization.

"We need to complete this term to continue the enormous transformation process that this Government is undertaking (...) The economy is doing better than ever, with record membership, almost 22 million people working . We currently have an increase in the minimum wage that has substantially improved the lives of citizens, and now a pensioner earns an average of 400 euros more than they did during the PP era," Montero stressed.

"We have many pending tasks, much work to do, and therefore we have plenty of reasons to be committed and enthusiastic and to push forward with the legislative session," the Minister of Finance concluded.