Staff Reporter
A STUDY carried out by the Institute for Fiscal Studies (IEF) has confirmed that if the Spanish Government followed the finance models in Germany, Switzerland, Canada and Australia, then the Balearic Islands would have more economic resources.

In every financial case, the Balearic Islands would benefit a lot more than they do currently, concluded the report drawn up by the above mentioned Institute which is dependant on the Ministry for the Economy.

The islands would also have economic resources above the national average, something which the islands currently do not benefit from.
At present the Balearic Islands occupy the last position on the regional finance ranking.
If all Spanish regions and the central Government copied the finance model that is applied in Switzerland, then the Balearic Islands would get twice the amount of funding than it does at present. In fact, the islands would receive the most resources per inhabitant than any other Spanish region.

With regards to the financial model followed in Canada, if the islands also adhered to this system then they would receive the most funding per capita than any other region and would also be above the national average.

The German financial model would put the Balearic Islands in second place for economic resources, following Madrid. However the islands would be well above the national average for resources per capita.

In spite of the conclusions that the Balearic Islands would be one of the regions to benefit most from a new financial model, the central Government is not in agreement due to one basic fact; there would be other regions that would lose out.

The Government wants those regions that are below the 100 level for economic resources to at least achieve this minimum, but not to the detriment of other regions. This is to say that the Government does not want other regions to fall below the 100 resource per capita level, for the sake of raising the economic levels in a few other regions.

However, all these financial models that have been researched in the study, include inter-regional compensation. In this way solidarity is horizontal, that is to say, the richer regions would give money directly to the poorer regions.

Furthermore the study carried out by the Institute for Fiscal Studies (IEF) shows that the majority of these financial models would bring with them a corresponding higher level of tax for the regions.

With reference to the German model for example, the taxes passed onto the regions are significantly higher than those in the Spanish financial model.
The Swiss financial model takes into account fiscal capacity and power, as well as the geography of regions and the density of the population. According to the report the Swiss model entails less regional responsibility than the German model.

On different lines, the financial model in Canada is original in that each region applies its own individual fiscal model. With this system the poorer regions are compensated with federal funds.

Lastly, the Australian model has the lowest taxation levels corresponding to the economic resources. It is the only system that does not take into account incomes.


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