Balearics could be "pardoned" almost 1,000 million euros of debt

The Balearics owe Madrid close to 5,000 million euros

Marga Prohens, president of the Balearics, with education minister Antoni Vera

Marga Prohens insists that there can be no "preferential treatment" for Catalonia. | Archive

Andrew EdePalma03/11/2023 09:09

The agreement by which Esquerra Republicana de Catalunya (ERC) will support the investiture of Pedro Sánchez as Spain's prime minister includes a highly significant financial benefit for the Balearics.

This will be a "pardon" for part of the debt that is owed to the Spanish government. Potentially this could be 20%, which is what the ERC agreement requires for Catalonia. Were this percentage to be applied to the Balearics, the pardon would wipe off 980 million euros of the 4,828 million euros that are owed to Madrid.

The deal with the ERC will benefit regions said to have been affected by financing mechanisms implemented by the one-time Partido Popular government of Mariano Rajoy, the Balearics being one of these regions.

It was once the case that the Balearics carried no debt to the Spanish government. This changed because of the financial crisis. The bulk of the debt arose when José Ramón Bauzá of the PP was the president of the Balearics.

It may be, however, that the percentage for the Balearics is lower than the Catalonia 20%. The Sánchez administration, currently in an acting capacity, says that the level of the pardon will be determined on a case-by-case basis. The PP government in the Balearics is insisting that it is the same and that there is no "preferential treatment" for Catalonia.

The agreement with the ERC is one further step in securing the Sánchez investiture. At present, this isn't totally certain, as Junts per Catalunya have yet to make their own agreement.