Are Andalusian accounts intervened by the State?

• Budgets.Hacienda denies the intervention of Andalusia: "There is no arbitrary treatment, all CCAA are required the same"
• Public funds: The Government of Pedro Sánchez "intervenes" Andalusia and demands cuts

The decision of the Ministry of Finance to prevent the Junta de Andalucía from going to the markets to seek financing has caused a cascade of seemingly contradictory arguments.

Are the Board accounts really intervened?

The Ministry of Finance monitors compliance with the deficit objectives of the autonomous communities and makes available to them an extraordinary fund to guarantee liquidity. In return, it requires an adjustment plan to correct deviations from the objectives. It is not a law intervention, but in fact, because there is an increase in controls over the autonomous estates and the Government has the final say on community spending.

What is the FLA?

The Ministry of Finance has extraordinary funds for deficit situations. For those autonomous governments that meet the objectives there is the so-called Financial Facility Fund (FF), which is compatible with communities seeking parallel financing in the markets. However, for those communities that have not complied with the three fiscal containment rules (expenditure, deficit and debt), there is the so-called Autonomous Liquidity Fund (FLA), which, as the Government now maintains, closes the path of markets, in addition to demanding greater control of the State over the accounts.

What is the financial situation of Andalusia?

Andalusia was hosted by the Liquidity Fund for Autonomies (FLA) during the worst years of the crisis. But, after several years of severe cuts, he managed to reduce his expenses and keep his deficit at bay. In fact, the Government of Susana Díaz said in October 2018 that it had become the first autonomous community to part with the protection of the State that, according to the Socialist Government, had cost 1.8 billion in interest. However, the community again failed to meet the deficit targets in 2018, according to reports issued by the Ministry of Finance.

Whose responsibility is the failure of the Board deficit?

The 2018 deficit is entirely attributable to the last Government of Susana Díaz, as the relief in front of the Board did not occur until the second half of January 2019. Andalusia initially closed the year 2018 with a deficit of 0.41%. However, throughout 2019, overdraft expenses attributed to 2018 were declared, related to several judgments contrary to the interests of the Board for extra costs, for example, of the works of the Seville metro. That caused the final deficit of 2018 to be 0.51%, further away from the expected target, set at 0.4%.

Did the Board know that reality?

The Junta de Andalucía knew the breaches. But he believes that the deviation from the deficit target is not structural but merely temporary and he hoped that the Government would value it. The Ministry of Finance had already pointed out in October that if it wanted to have state funds it should do so through the FLA and not the Financial Facility Fund (FF). But what the Board did not expect is to close the door of the markets, where it planned to raise around 1,930 million euros throughout 2020.

According to the criteria of The Trust Project

• Andalusia
• Public deficit
• Maria Jesus Montero
• Juan Manuel Moreno Bonilla

CommunitiesHacienda asks for an adjustment plan to Andalusia for including the stability objective

It will not fall to 2% of GDP The Government admits that it will fail to meet its own softened deficit target

Public accounts The Board maintains that there is room for negotiation with the Treasury to prevent the new intervention of its accounts