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Spanish Prime Minister proposes a constitutional amendment to include deficit and debt limitations for all public administrations

Main Catalan forces share the need to control public spending and balance public finances but many fear the proposed measure could be used to trim Catalonia’s self-governance. In this line, the Catalan Government’s spokesperson asked Catalan parties to frontally oppose to any measure limiting fiscal autonomy. However, other Catalan politicians are open to discussion but “want to look at the small print”. Furthermore, the Spanish Parliament also approved the fiscal measures announced last week, by which the State will save around 5,000 million euros this year.

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23 August 2011 11:16 PM

by

ACN / Gaspar Pericay Coll

Barcelona (ACN).- Going beyond what German Chancellor Angela Merkel and French President Nicolas Sarkozy were asking for, Prime Minister, José Luís Rodríguez Zapatero, proposed to include on the Spanish Constitution a deficit and debt limitation affecting all public administrations in the country. Zapatero, from the Socialist Party (PSOE), proposed the amendment in front of the Spanish Parliament during the debate to approve the fiscal measures announced last week to save 5,000 million euros this year. The constitutional amendment was backed by Mariano Rajoy, the leader of the main opposition party, the Right-Wing People\u2019s Party (PP). Despite agreeing on the principle of keeping public spending under control, Catalan parties are cautious in front of an agreement between Spain\u2019s two main parties, as some fear it could include centralist measures and thus reduce Catalonia\u2019s self-governance. The spokesperson of the Catalan Government, Francesc Homs, quickly reacted to Zapatero\u2019s announcement and asked all the Catalan parties to frontally oppose the measure as it could trim \u201CCatalonia\u2019s fiscal autonomy and thus its self-governance\u201D. Other Catalan politicians were less straightforward and said to be open to discussion. Besides Zapatero\u2019s proposal, the Spanish Parliament approved the fiscal measures announced on Friday by the Spanish Government that will save 4,900 million euros this 2011. The measures focus on the VAT for new housing purchase, generic drug prescription and corporate tax for large companies.


Josep Antoni Duran i Lleida, the Spanish Parliament\u2019s spokesperson for the Centre-Right Catalan Nationalist Coalition \u2018Convergència i Unió\u2019 (CiU), which runs the Catalan Government, said to share the principle of budget stability and public spending control. However, coinciding with the Catalan Government\u2019s spokesperson, he said he wanted to \u201Clook at the small print\u201D before giving his group\u2019s support. Duran i Lleida thus showed some caution, fearing that the PSOE and the PP could use the need for this budget stability measure to write the amendment in a way that could dramatically trim Catalonia\u2019s self-governance. Joan Tardà, the Spanish Parliament\u2019s spokesperson for the Left-Wing Catalan Independence Party (ERC), stated that \u201Ceach time PSOE and PP agree on something, in Catalonia we start to fear\u201D.

Catalonia\u2019s Opposition leader, Joaquim Nadal, from the Catalan Socialist Party (PSC) that supports Zapatero, was far more moderate. Nadal said that limiting the debt was \u201Ca reasonable measure\u201D to adopt for \u201Cbudget discipline\u201D  in the current times. However, Nadal stressed two conditions, he would agree if the debt and deficit limitation does not put the Autonomous Community funding scheme in jeopardy and if all public administrations are included. He also accused Homs of asking for the PSC vote against the proposal when the details are still unknown.

Zapatero\u2019s proposal was vague

Zapatero did not go into details regarding his proposal when he announced it in front of the Spanish Parliament this Tuesday morning. He simply talked \u201Cto limit deficit and debt of all public administrations\u201D within Spain through an amendment to the Spanish Constitution. He is also said to have already talked to Rajoy before the parliamentary debate, as well as to the Socialist candidate to the next Spanish elections, Alfredo Pérez Rubalcaba, as way of showing that the two main parties (PSOE and PP) were sharing this objective. Zapatero asked other groups to join \u201Cthis consensus [\u2026] to transform it into the largest possible consensus\u201D. The President of the Spanish Parliament, José Bono, announced that the amendment could be debated in the coming days through an urgent track. As it already counts with the votes from the PSOE and the PP it would thus be approved next September, before the next Spanish elections scheduled on November 20th.

New fiscal measures approved

The Spanish Parliament approved the measures announced last Friday by the Spanish Government. The measures can be divided in three. Firstly, the VAT on the purchase of new built flats will be halved, passing from 8% to 4%, in order to boost the sector. It will be in place the rest of 2011 and the entire 2012. This measure was welcomed by the construction industry, as well as by the main opposition party the People\u2019s Party, which said it will extend it to 2013. Secondly, corporate tax payments of companies with more than 20 million euro annual turnouts will have to be advanced. The measure does not affect the tax base and rate, but it directly has an impact on companies\u2019 cash provisions. This particular measure was not backed by the Right-Wing parties. Finally, the last measure is that doctors will be obliged to prescribe medicine\u2019s active principal, and not the drug\u2019s commercial brand, while chemists will have to offer the client the possibility to buy the cheapest one. Since the three measures were voted together, the People\u2019s Party, CiU and the Basque Nationalists abstained. The measures were thus just approved with the simple majority of the Socialist Party\u2019s votes.

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  • Zapatero talking before the Spanish Parliament (by La Moncloa)

  • Zapatero talking before the Spanish Parliament (by La Moncloa)