Politics

The Spanish Finance Minister, Cristóbal Montoro, presented the budget data from January to March 2012. The Autonomous Community Governments together had a 0% deficit in this period. Among them, Catalonia’s had a 0.45% budget surplus, while in the same period of 2011 it had a 0.65% deficit. Montoro emphasised that the data shows “the big effort” the Autonomies are making.

The President of the Catalan Government has organised a summit with all the parties at the Catalan Parliament to discuss a new fiscal scheme for Catalonia. According to official studies, Catalonia gives 8.5% of its GDP each year to pay for investments and services in the rest of Spain, an amount that represents more than €17 billion per year. Some parties state that the current model is unsustainable for Catalonia and represents a plundering of its finances. Others have a more moderate opinion. Nonetheless, all political parties in Catalonia now believe that this amount is excessive and that the fiscal scheme between Catalonia and the rest of Spain should be reviewed. However, they significantly disagree on the formula and the timing.

The Catalan Government’s finances corresponding to the first four months of 2012 showed a €535 million budget surplus. Spending has been reduced by €240 million in comparison to the same period last year, when the Catalan Government’s budget had a deficit of €1.13 billion. The budget surplus is mostly due to the transfers made by the Spanish Government, which partially correspond to payments from 2010.

Using its absolute majority, the People’s Party (PP) has approved the Spanish Government’s budget for the current year refusing 3,100 amendments from the opposition. Only 3 minor amendments from the opposition parties have been accepted. The budget does not respect the current legislation, which obliges to guarantee a minimum investment percentage to be made in Catalonia in order to compensate for an historical lack of money being put into the Autonomous Community. According to Catalan law, approved by the Spanish Parliament, Catalonia should receive at least 18.66% of all the territorial investment made throughout Spain; however it only receives 11.04%.

Esperanza Aguirre, one of the main representative from Spanish Nationalism, has asked to postpone the game or playing it in an empty stadium in order to avoid supporters whistling and booing the Spanish National anthem and Prince Felipe, as was the case in 2009. This season’s Spanish Cup Final will be decided in Madrid between FC Barcelona and Athletic Club of Bilbao, a Catalan and a Basque team. Catalan politicians have criticised Aguirre for mixing football and politics. CiU and the PSC have coincided in pointing out that Aguirre is ready to talk about the Cup Final but not about Madrid’s public deficit deviation. Besides, an extreme-right demonstration in Madrid organised on the same day has been authorised.

The Catalan Government will adjust its budget by €4.295 billion in 2012, through spend cuts of €2.680 billion and increasing revenue by €1.615 billion. With this plan, the Catalan Government will meet the 1.5% deficit target. The Council of Fiscal and Financial Policy (CPFF), which brings together the Spanish Government and the 17 Autonomies, has approved Catalonia’s budget adjustment plan for 2012-2014. The Spanish Government would pay part of the money owed, but not all of it. The Catalan Government has included a plan B in case the Spanish Government does not honour its fiscal obligations towards Catalonia.

The third plan represents an additional budget cut of €1.5 billion, in order to meet the 1.5% deficit target for this year. The President of the Catalan Government, Artur Mas, said that the plan “guarantees essential services”. He also stated that if the Spanish Government had paid what it owed last year, the current reduction would be halved. The plan decreases budget allocations for public companies, reduces public employee salaries once again, decreases the amount allocated for subsidies, delays investments, privatises some public companies, sells public buildings, and implements the measures decided by the Spanish Government regarding health and education. The opposition criticised the plan for not being concrete and effective enough.

The Catalan Parliament has approved Catalonia’s Law of Budget Stability, which is more restrictive than its Spanish equivalent. The Catalan law reduces the adaptation time set in Spanish law by 2 years. Furthermore, it sets a 0% deficit for 2020. The law has been approved with the votes of the Centre-Right Catalan Nationalist Coalition (CiU), which runs the Catalan Government, and the Conservative People’s Party (PP), which runs the Spanish Executive. Left-Wing parties have voted against the measure; according to them it follows the “0% deficit dogma” and forgets about “necessary” social spending.

The Catalan Government has rejected the Spanish Executive’s initiative to limit public healthcare to foreign nationals without a legalised residence status. The Spanish Government proposed that irregular immigrants would only have access to emergency rooms and obstetrics services, but not to regular treatments and consultations. The Catalan Health Minister, Boi Ruiz, confirmed on Friday that in Catalonia, all foreign residents, independent of their legal status, would have free access to the public health system for “solidarity” principles but also “for public health reasons”. Besides the ethical issue, experts had warned about infectious diseases that could have increased because of having groups of people excluded from the health system.

On Europe’s Day, CNA reflects the conference the President of the European Parliament gave in Barcelona last week. The German politician emphasised the importance of the Mediterranean Basin and its great economic potential; the historical moment we are living due to the Arab Revolution; the lack of leadership in Europe and importance of working for a strong European Union in order stay at the forefront of the political scene.

The Catalan Government has announced a plan against the Spanish Government’s “recentralisation offensive”. One of its actions is taking the education and healthcare reforms adopted by Madrid to the Catalan Council for Constitutional Guarantees, as a first step to bring them to Spain’s Constitutional Court. The Catalan Government believes that some of the measures invade its jurisdiction, as it directly manages education and healthcare. Another measure is issuing a report pointing out the Spanish Government’s duplicities, such as maintaining ministries such as education, healthcare and culture. These policies are managed by the Autonomies. Left-Wing opposition parties have urged the Catalan Government to take further measures, while the PP has accused the Catalan Executive of “lying”.

Last Sunday Socialist candidate François Hollande won the French presidential elections. After 17 years of conservative government the French voted for change including the French community of Catalonia, which had the possibility to express itself in 19 polling stations set up all around Catalonia. Between the first round of voting -two weeks ago- and the second round, the rate of electoral participation in Catalonia increased from 37,5% to 42%. The Franco-Catalan community came out strongly in favour of the Socialist candidate, with 52.79 % for Hollande as against the figure of 42.21% who voted for Sarkozy.

April was the second consecutive month that experienced a fall in unemployment in Catalonia. Last month there were 2,526 fewer people registered as unemployed in Catalonia. The total number of jobless people was 635,721. In Spain, unemployment decreased by 6,632, a 0.14% drop, totalling 4,744,235 jobless individuals at the end of April. In Catalonia, unemployment decreased in the coastal provinces of Girona and Tarragona.

The President of the European Central Bank, whose Governing Council met in Barcelona on May 3rd, praised the Spanish Government’s “significant effort” made in a “very short period of time” to approve structural reforms. However, Mario Draghi, asked Spain “to persevere” in the strategy based on austerity and accomplish further reforms. The ECB’s President emphasised Europe’s need to adopt measures strengthening economic growth but without abandoning the principles of austerity. Draghi recommended continuing to reduce public spending in order to control the deficit. As expected, the ECB is maintaining the interest rate at 1%.

Coinciding with the European Central Bank Governing Council organised in Barcelona, the President of the Catalan Government, Artur Mas, met with Mario Draghi and other members of the ECB Governing Council. Mas took the opportunity to explain to the ECB the Catalan Government’s austerity measures and its efforts to reduce Catalonia’s public deficit. He also spoke of his party’s support to all the reforms taken at Spanish level, despite being unpopular. However, Mas warned the ECB President that reducing the deficit too fast in the middle of an economic recession might worsen the crisis.