Unfair?: Balearics investment

President Bauzá is apparently hacked off by the fact that the Balearics will receive slightly less than 79 million euros worth of state public sector investment next year. 0.7% of the total investment in the regions by Madrid will float across the sea to the Balearics where Bauzá has been making a decent fist of getting the islands' deficit into line with that demanded by Madrid. Bauzá has towed the line, toadied to Rajoy some might say, and look what he gets for his trouble. If you take the shilling of following the Partido Popular party line, you end up without a shilling to your name. Political loyalty not being repaid? I'm not convinced.

Bauzá says the investment is unfair, but he isn't about to throw a hissy fit and go all Mas on Madrid. At the meeting of the regional presidents, it has been important to be seen to be putting on a face of unity for international and domestic consumption. Unfair, but how unfair?

The investment is a pittance. 80% of it is to come from the national ministries responsible for development, agriculture, food and environment. If these were divvied up equally, it might mean a mere 19 million for projects that would fall under the development ministry (typically transport infrastructure). The Balearics need more not less transport investment, especially in order to compensate for geographical isolation that make the islands more expensive and less competitive.

The Balearics have long been disadvantaged under the overall system of financing of the regions. Historically, the islands have been only one of three regions in Spain that have a negative balance, i.e. they provide more than they receive (Catalonia and Madrid are the others) under the system of financing whereby national government hands back a percentage of income tax and IVA revenues to the regions and via which the Balearics have always tended to get less of the pot. And this despite the principle under which regional financing operates - that known as "solidarity" under the Spanish Constitution.

The measly amount on offer for investment contrasts with that for the Canaries which will get almost four times as much as the Balearics, and there is more than just a hint of political expedience about how the investments have been allocated;  for example Galicia, where there are to be regional elections shortly, has the third highest percentage.

The cuts to regional investment can be explained and are explained by the parlous state of national finances. No one can doubt this explanation, but there is another dynamic at play, that of penalising the regions which have become the whipping boys for all Spain's troubles. The regions do soak up enormous amounts of finance, but they became, as far as the Rajoy government was concerned, public-finance enemy number one, once heaping all the blame for Spain's mess onto the previous Zapatero government had run its course.

Regional government and decentralisation are financial burdens, but they are burdens primarily because of the systems of administration (including, for example, the likes of island councils in the Balearics) and because these systems were allowed to develop without anyone saying boo. And once they were in place, they led to the excesses with which we have been made all too familiar.

There is a suspicion though that the regions are being subjected to a campaign of being undermined with the eventual aim of neutering or eliminating them. This is the extreme view, but it is one that has champions on the political right who have always been against the regions because they go against the notion of a nationalist Spain. A practical, as opposed to a political view of regional neutering would, it is argued, reduce the financial burden. Which is true up to a point, but key responsibilities that the regions have - for health, education, social services - would still have to be paid for and would still need local administrations. The question is whether these have to be political administrations.

But whether an undermining of the regions were styled as political or practical, it would be perceived by supporters of regionalism in the same way - as an assault on the solution that was adopted after Franco (regional government) to keep Spain together, not break it up.

Bauzá, so some would claim, is a turkey waiting to vote for Christmas wrapped up in the tin foil shield of a president protesting the unfairness of the Balearics being roasted to a crisp. He has been accused of being anti-regionalist. He couldn't possibly say that the investment is fair as he would be political dead meat if he were to. But how much does he really believe that it is unfair?


Any comments to andrew@thealcudiaguide.com please.