How regional governments will finance themselves is becoming relevant again now that they have settled their cutback policies and found out that the system is not making enough revenue. Experts denied that this was the case, and the political class just sidestepped the issue. Until now each regional government told its own version of the story, and the federal government is not producing any facts or transparent stories of its own.
Ultimately, nothing is what it seems, and everyone is unhappy with a system that does not allow governments to control both spending and raising revenue. Yesterday Mariano Rajoy had to quiet upstarts in his party because of their divergent points of view among themselves. Madrid put it on the table that Catalonia is ending up a lot better off with the current system than Baleares or Madrid because of a previous accord when Zapatero was Prime Minister.
Madrid President Ignacio González only gets two out of every ten tax euros that his region collects while Catalonia gets six out of ten. The fact that no regional government likes the financing system means that a new way should be created.
The roadmap for publishing fiscal balance sheets and then starting tax reforms for the regional governments seems well-written, although it would have been nice to have carried out this process earlier when it was originally needed.
Also, a solution that gives the regions more flexibility is needed, because they need to be able to finance themselves through independent strategies but keep certain forms of region-to-region solidarity.