Madrid asks the Finance Minister for explanations about the distribution of European funds

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The Community of Madrid has formally requested explanations from the Ministry of Finance about the distribution of European funds to mitigate the economic impact of the coronavirus. He has done so in a letter that the Minister of Finance, Javier Fernández-Lasquetty, sends to MarÃa Jesús Montero to express that The method used is “incomprehensible”.

“It is not possible to understand how the impact of the crisis has been calculated in each autonomous community, given that today that figure does not exist”, argues the representative of the Government of Isabel DÃaz Ayuso. “The calculation of the Regional Accounting of Spain is not prepared on a semi-annual basis, but annually. Therefore, there is no official figure available that makes it possible to compare the fall in regional GDP between the first half of 2019 and the first half of 2020, “he adds.

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According to Lasquetty, “that data either does not exist or has not been made public, which prevents knowing the specific basis used by the Ministry of Finance to proceed with such an important distribution of European funds. “The Madrid counselor maintains that in the event that the INE had already made such a comparison,” it is equally incomprehensible that no be published immediately to confirm the validity and correctness of the announced cast. ”

The Ayuso Government complaint comes after the department of MarÃa Jesús Montero has allocated European funds for 2021 and 2022 and Madrid will be the third region that receives the most, but at a notable distance from Andalusia and Catalonia. Specifically, Madrid will receive 1,284 million, which represents 12.8% of the total. Andalusia will receive 1,881 million, 18.8%; and the amount for Catalonia will amount to 1,706 million (17.1%).

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“It is very necessary that the Ministry of Finance provide adequate and sufficient explanation of the methodology and the specific figures used, given that they have not been published or officially communicated to the autonomous communities “, Lasquetty explains in his letter. And he adds:” Transparency, which is something basic in all public management, it takes on special relevance in the management and distribution of these community funds, the execution of which is key to the economic and social recovery of the whole of Spain “.

The Treasury, for its part, stresses that the criteria used in the distribution are “the same ones used in the EU”, which take into account the impact of the pandemic on the wealth of each territory, on unemployment and unemployment among young people. And he adds that the Community of Madrid received 21% of the Covid fund for autonomies, which represented 3,346 million of the total of 16,000 million. In this case, the region was the main beneficiary, slightly above Catalonia (3,166 million).

Distribution criteria

There are three indicators used, according to Montero’s team: the first is aimed at measuring the impact of the pandemic on the wealth of each autonomous community. This indicator has a weight equivalent to 2/3 of the total distribution and follows two steps.

First, it takes into consideration the relative weight of each region in the total fall in GDP of Spain between the first semester of 2019 and the first semester of 2020. To estimate this indicator, the most up-to-date data available published by the AIREF, at the regional level, and by the INE, at the national level, have been used .

Secondly, once the above percentages have been obtained, the taking into account relative prosperity of each community and autonomous city, measured as GDP per capita in purchasing power parities with respect to the average for Spain, according to the latest statistics published by Eurostat for 2018.

The second indicator measures the impact of the crisis on unemployment, with a weight in the total distribution equal to 2/9 of the allocation. It is calculated with the weighted sum of two variables: 75% is determined by the weight of each region in the total unemployed in January 2020 and 25% by the relative weight of each region in the increase in the number of unemployed between January 2020 and the average June-August 2020. The data used in these calculations are those of registered unemployment published by the State Public Employment Service.

The third indicator measures the impact of the crisis on youth unemployment, has a weight of 1/9 of the total allocation and follows the same criteria established for total unemployment, but considering only the unemployed between 15 and 24 years old.

Additionally, aid is included for the outermost regions (in the case of Spain, the Canary Islands) equivalent to 30 euros per inhabitant, for which the population figures published by Eurostat for 2019 have been taken.

Criticisms of Franco

For his part, the Government delegate in Madrid, Jose Manuel Franco, has condemned the “desperate attempt” of the president of the Community of Madrid to seek “grievances” with European recovery funds to attack the central government, when the distribution has been made according to EU criteria that the autonomous regions have known since October and which none of them opposed.

“By dint of criticizing everything, the Ayuso government does not have any credibility right now. He has said that he will denounce before the EU the distribution of funds that has been made following the EU’s own criteria, “said the former PSOE deputy, reports Europa Press.

On the other hand, in the same vein as the Puerta del Sol Executive, the economic head of the PP, Elvira RodrÃguez, has stated on TVE that “Catalonia has come out much improved with respect to Madrid” in the distribution of European funds and he has demanded “transparency” from Minister Montero. “This Government is not transparent”RodrÃguez has stated, expressly endorsing the letter from the Madrid Finance Minister.

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