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Catalan Government to require Madrid to pay the €2 billion owed

The Catalan Government will file several formal demands for payment of the €2.02 billion the Spanish Government legally owes Catalonia from the 2008-2013 period. The money represents 1% of Catalonia’s GDP or 7% of the Catalan Government’s budget. According to the Statute of Autonomy, which was approved by the Spanish Parliament and came into force in 2006, the Spanish Government was obliged to invest a percentage equal to or higher than Catalonia’s share of Spain’s GDP between 2007 and 2013 in order to compensate for an historical lack of infrastructure investment. If it was not doing so, the Spanish Executive had to compensate Catalonia financially. The measure was adopted after exhaustive negotiations and was essential to the approval of this law by the Catalan people through a binding referendum. However, the Spanish Government never honoured it. Madrid compensated Catalonia for the lack of investment in 2007, but not for the remaining years.

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08 January 2014 08:31 PM

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ACN

Barcelona (ACN).-The Catalan Government will file several formal demands for payment of the €2.02 billion the Spanish Government legally owes Catalonia from the 2008-2011 period. The money represents 1% of Catalonia’s GDP or 7% of the Catalan Government’s annual budget. According to the Statute of Autonomy, which was approved by the Spanish Parliament and came into force in 2006, the Spanish Government was obliged to invest a percentage equal to or higher than Catalonia’s share of Spain’s GDP between 2007 and 2014 in order to compensate for an historical lack of infrastructure investment. If it was not doing so, the Spanish Executive had to compensate Catalonia financially. The measure was adopted after exhaustive negotiations and was essential to the approval of this law by the Catalan people through a binding referendum. However, the Spanish Government never honoured it. Instead of investing around 19% of Spain’s total infrastructure investment in Catalonia, the Spanish Government has only ever planned to invest between 11% and 13% (depending on the year), and since each year it was very far from executing all the planned investments, the actual investment was even lower. Madrid compensated Catalonia for the lack of investment in 2007, but not for the remaining years.


The current Spanish Finance Minister, Cristóbal Montoro, stated a year ago that he did not recognise this debt because it was the product of “past agreements”. Ironically, the current Spanish Prime Minister, Mariano Rajoy, stated in 2010 in Barcelona – before the elections – that PM José Luís Rodríguez Zapatero had to pay this debt. In the last few years, the Catalan Government has been pushing for payment of this money through political negotiations, taking into consideration the difficult situation of Spanish finances. However, now it will use all the formal channels since the issue is pressing and the Catalan Government is obliged to sell €2.3 billion of assets this year to meet the deficit targets imposed by the Spanish Government for 2014. The formal requirement is the legal step prior to filing an administrative appeal at the Spanish Finance Ministry.

The accumulated debt between 2008 and 2011 amounts to a total of €2.019 billion, according to calculations made by the Catalan Finance Ministry. The detailed amounts are as follows: The Spanish Executive owes Catalonia €759 million for 2008, €211 million for 2009, €719 million for 2010 and €330 million for 2011. Those amounts should already have been transferred by now. In addition, the amounts for 2012, 2013 and 2014 still have to be calculated since the official numbers are issued with a 3-year delay . The €330 million corresponding to 2011 is an estimate, since the Spanish Finance Ministry has not transferred to the Catalan Government the definitive calculations. However, the Spanish Government’s budget for 2014 does not provide for any transfer to the Catalan Government linked to this debt. The only time this money was paid was in 2010, when Zapatero’s Cabinet transferred €335 million corresponding to 2007.

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  • Catalan Government to require Madrid to pay the €2 billion owed (by ACN)

  • Catalan Government to require Madrid to pay the €2 billion owed (by ACN)