• Tue. May 28th, 2024

The allocation of welfare funds


Mar 25, 2024

In the distribution of tasks, autonomous communities are responsible for providing key services of the welfare state, such as health, education, social services, and housing. Over the past four decades, the constitutional development has shifted from a centralized state to a federal model where regional governments have control over 24% of the income, compared to 26% in the United States and 40% in Germany. It is more accurate to refer to financing the welfare state rather than autonomous financing.

The lack of resources due to financial deficiencies has been a major issue affecting the autonomous communities, leading to over-indebtedness. This has contributed to Catalonia’s discontent, with the crisis worsening under PP governments. However, improvements were seen with the coalition government’s approach of pardons, amnesties, and dialogue. In this context, the Generalitat of Catalonia has proposed a Unique financing model to address the financial challenges.

The proposal is significant as Catalonia aims to collect and legislate all taxes, while also contributing to a territorial rebalancing fund to support communities with less fiscal capacity. The focus is on increasing tax autonomy, fiscal responsibility, financial sufficiency, and transparency, while upholding principles of loyalty and solidarity. The Minister of Economy should advocate for this proposal to ensure consistency and fairness in the fiscal system.

Rather than focusing solely on fiscal balances, it is important to consider values and principles to guide financial decisions. Learning from positive international experiences and reaching agreements over time is more effective than fixating on immediate figures. By studying successful models and prioritizing cooperation, progress can be made in the realm of financial policy and regional development.

By editor

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