Balearic finance minister, Rosario Sánchez, is holding talks with party representatives. | MDB


In the context of discussions regarding reform of the regional financing system, President Armengol is proposing a system of fiscal federalism.

To this end, the Balearic minister of finance, Rosario Sánchez, has started talks with representatives of political parties to hear their views. The government would ideally like to be able to present a proposal with global approval and which would be an alternative to the document sent by the national ministry of finance to regional governments.

One of the points of disagreement that the Balearic government has is that the Spanish government's proposals don't take account of floating populations. Sánchez accepts that there is an issue with depopulation in some of Spain's regions, but equally there is one with overpopulation in others, on top of which there are large floating populations - Catalonia, Madrid, Valencia are among other regions that have to contend with these. As well as seasonal workers and tourists, these floating populations include people with second homes and teleworkers.

As for fiscal federalism, this essentially implies greater tax capacity in terms of retaining revenue raised by a region. It would also mean the cancellation of debt - partial at least - which is owed to the Spanish government and has come about because of underfunding inherent to the existing regional financing system.