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At the end of October, the Valencia City Council reported that its draft budget for the year 2022 is set to exceed the amount of 1 billion euros for the first time in the city’s history. Going over that milestone was possible with the addition of an estimated 60 million euros (at least) coming from the EU’s Next Generation Fund, set to finance recovery in the bloc.
The Mayor of Valencia, Joan Ribó, explained that the initial forecast of the municipal government for the accounts for 2022 was 955 million euros, a figure already expanded weeks ago. This happened thanks to the report of the Municipal Intervention that reflected the improvement of the revenue perspectives raised in the General State Budget of Spain. Furthermore, the City finally recovered some VAT tax from the central government – having been waiting since 2017 for that amount of 24 million euros.
All in all, it was close, but what really pushed things over the impressive barrier of 1 billion euros was the support from the EU recovery fund. The draft budget is being expanded again by adding the funding forecasts derived from the contributions of the Next Generation Fund, for an initial amount of 60 million euros more.
Ribó said that this is "a very significant step", and reiterated his satisfaction with this increase in resources, which will serve to promote better management of goods, services and investments to be made in the municipality.
For his part, the Finance Councillor, Borja Sanjuán, said that this means “learning the lessons of the pandemic: that it is not better to have a small public sector, but a public sector capable of dealing with difficult situations and promoting recovery.”
He added: "For the first time we are facing a crisis with everyone clear that the important thing is that the public sector is a lever of reactivation, and the City of Valencia will be a great lever of recovery for this city to assume its role as a leader in a new economic moment”.
What are the reasons for that and are there any possible solutions for that problem?
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