STATE FINANCING

PP premiers intensify pressure for new regional financing law

Madrid leader gives Rajoy January deadline to deliver fresh model as government stays silent amid Catalonia debate

Prime Minister Mariano Rajoy's administration is finding itself under growing pressure from premiers of its own Popular Party (PP) who are closing ranks to demand that the government move swiftly to change the regional financing law.

And leading the pact is Madrid premier Ignacio González, who today in an EL PAÍS column, gives Rajoy a deadline of less than three months to come up with reforms that would help regions cope with the shortage of revenue they are facing as a result of painful cuts, especially in health and education, services the regions administer.

In his column, González says the government must approve the new regional finance law by January 1 "because that is the way the law establishes it, and that is what we agreed at the last premiers' conference held a year ago."

All of the PP premiers consulted by EL PAÍS want changes in the way the central government distributes revenue to the regions. González said reform is needed to "end the injustice and incoherencies of the current model."

We must end the injustice and incoherency of the current model"

Alberto Fabra, the Valencia premier, said the model used by the government in the way revenue is distributed must change so that spending on each citizen in Valencia in education and health is the same as it is for the rest of Spaniards in other regions. Murcia premier Ramón Luis Valcárcel said a new model should be based on the real needs of each region, and not just statistical criteria. Murcia, he said, receives 245 million euros less than it should when compared to other regions.

González, the PP leader in Madrid, said he didn't want to mix the current debate over Catalonia and its independence drive with the regional financing issue. Just last week, he suggested that a referendum should be held in Madrid so that voters can be asked what type of financing plan they want.

At the same time, Finance Minister Cristóbal Montoro created a stir last week when he said that discussions over "regional financing are not on the table." Last week's presentation of a better financing deal for Catalonia region by the PP leader in the region was dismissed by the ruling party's chiefs in Madrid.

In fact, according to party insiders, the Rajoy administration has been studying different options but prefers to remain quiet about the proposed changes due to the risk of a rebellion by PP barons.

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