2024-01-07 05:13:02
Asturias will increase its debt throughout this year by just over 58 million euros, but despite this rise it will remain in the group of communities with the lowest debt in autonomous Spain. The Principality had been one of the four autonomies that had reduced its liabilities since 2020, the year of the covid pandemic, but in the largest budget of the autonomous series, of 6,348 million, the debt backpack grows again.
The Principality ends the 2023 financial year with a debt of 4,255 million euros and in the Budget for this year it has recorded a debt need of 651 million euros, which represents the third highest chapter of the regional accounts, only behind the Ministry of Health, which amounts to 2,322 million euros, and the Ministry of Education, which has been allocated 853.6 million euros. In the previous year, the financial burden had been around 643 million. When this year ends, on December 31, the debt of the administration of the Principality will stand at 4,314 million euros, according to the forecasts advanced by the Asturian Government in the Budget law, which came into force last Monday after being approved by the General Meeting of the Principality in the last plenary session of 2023.
The bulk of the Principality’s new debt, 592 million euros, is intended precisely to amortize the liabilities accumulated by the autonomous administration from last years, while another 29.8 million will be to face the negative settlements of the autonomous financing model that are still in progress. pending because the advance payments made by the State in 2008 and 2009 were higher than the tax revenues of those years, due to the fall in economic activity in the years of the great recession.
The report on the accounts of the Principality for next year states that The financial burden of the regional debt continues to decline compared to current income, since it drops by more than one point compared to the figures for 2023, to stand at 12.8 percent, thus reaching the lowest percentage in the last four years. This percentage “easily complies” with the limit set by the organic law of financing of the autonomous communities (LOFCA), which places the ceiling of the financial burden at 25 percent with respect to current income, according to that same report.
The Government of the Principality has been characterized for several legislatures and mandates of different governments by making moderate use of recourse to debt., which have placed Asturias in the group of the five autonomies with the lowest percentage of debt compared to its Gross Domestic Product (GDP). In the years prior to the great economic crisis, it did not usually exhaust the maximum authorized debt, a strategy that, on the other hand, other autonomies did resort to. On the other hand, in the years of the crisis the Principality had to borrow up to the maximum allowed by the financial stability regulations in order to be able to meet the expenses generated by basic services. The new indebtedness of each year that, until then, was largely allocated to financing investments and new projects, had to begin to be dedicated to current spending that was no longer possible to cover only with the income from tax collection in free fall due to the marked decline in economic activity between 2008 and 2013. From this period and with the gradual recovery of income, due to the economic improvement, the new debt of the Principality each year has a preferential and almost exclusive destination: pay the maturities of the debt that skyrocketed in the years of the crisis.
Despite the fact that the coronavirus pandemic caused the suspension of fiscal rules, Asturias was one of the four autonomies that reduced its debt in recent years, as LA NUEVA ESPAÑA reported last October. The Principality’s economic and financial report for the 2024 Budget highlights “the important efforts to contain debt levels” and recalls that the 2022 financial year closed with a reduction in net debt by 151 million euros. Asturias ended that year as the third autonomous region with the lowest debt in relation to its GDP, with 16.1 percent, only behind Madrid (13.3%) and the Canary Islands (13.6%).
The prudent strategy in resorting to debt is precisely the one that would leave the Principality as one of the most affected autonomies if a global debt forgiveness or write-off were opted, hence the importance of the formula finally chosen by the Ministry of Finance. Asturias, in addition, was one of the communities that used the Autonomous Liquidity Fund (FLA) to a lesser extent. In fact, the Principality’s long-term debt portfolio was made up, as of December 31, 2022, of four debt issues and loan operations with 16 financial entities, while the State’s financing mechanisms represented 21 .8 percent of the total.
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