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The Spanish Constitutional Court has lifted the temporary suspension of the Catalan Government’s tax on total bank deposits while it is waiting to issue a sentence on the measure. The Spanish Government took Catalonia’s tax on bank deposits, the drug prescription fee and the new judicial taxes to the Court. The Constitutional Court accepted Madrid’s appeal in January and temporarily suspended the implementation of the three measures for five months. After the period is over, the Court believes that, taking into account the need to reduce public deficit, the Catalan Government can now implement the tax on banks, while the magistrates agree on a definitive sentence. However, the Court has extended the suspension on the judicial and drug prescription fees.

On Tuesday, the Catalan Government posted the so-called fiscal balances for 2010, showing the difference between the money paid by Catalans in taxes and fees to the Spanish Government and what comes back in form of funds, services and infrastructure. Using the monetary flow formula, Catalonia had a fiscal deficit of €16.54 billion, representing 8.5% of its GDP. Using the benefit formula, the fiscal deficit represents 5.8% of the Catalan GDP (€11.26 billion). The Catalan Finance Minister, Andreu Mas-Colell, stated that both formulas “are complementary” but he found the monetary flow one to be closer to the reality. The figures are similar to the results from previous years as well as to the study published in 2008 by the Spanish Finance Ministry with data from 2005. In the last 25 years, Catalonia has given away 8.1% of its GDP each year.

The Spanish Government has approved its Education Reform, which aims to make Spanish a teaching language in Catalonia and reduces the Autonomous Communities’ power to manage their education system. The new law states the Spanish Government is to decide on the curricula of the main subjects, such as History. In addition, tests will be set at the end of the schoolstages and their contents will be exclusively decided from Madrid. Since the tests will be the same for the whole of Spain, items regarding Catalan culture, geography or history will not enter into the final examinations. The Catalan Education Minister, Irene Rigau, considered the law to be “pre-democratic” and “re-centralist”. She also stated that “it is impossible to honour it in Catalonia”, since privately-owned schools teach in Catalan and the law goes against the Catalan Statute of Autonomy (Catalonia’s main law).

Between January and March, the Catalan Government had a budget deficit of €411 million, representing 0.21% of Catalonia’s GDP. The definitive deficit target for 2013 for each Autonomous Community has not been set by the Spanish Government yet. Madrid set a 1.2% target a few weeks ago but everybody assumes it will be raised as negotiations are on-going with the Catalan Government. Rumours indicate that Catalonia’s deficit target may finally be set at around 1.8%. The Autonomous Communities posted a total public deficit of €1.24 billion at the end of the first quarter, corresponding to 0.12% of Spain’s GDP. According to the Spanish Deputy Minister for Budget, the figure represents half the deficit posted in the same period last year.

As it was announced on Monday, the Catalan Government has adapted its budget extension guidelines to a higher deficit target, while it is waiting to find out the definitive deficit target decided by the Spanish Government. Since the elections were held in November, it was the new Catalan Government’s responsibility to draft the budget for 2013. However, the budget has not been presented since the Catalan Government disagrees with the deficit target imposed by the Spanish Government and it is negotiating for its reduction. Meanwhile, it is operating with an extension of the 2012 guidelines, a procedure run by a series of strict guidelines. The guidelines included the 0.7% deficit target initially allowed for this year, which have obliged the Catalan Government services to implement severe spending limitations in the first months of the year. Most of the opposition criticised not debating the new guidelines.

During the weekend, the Spanish Finance Minister, Cristóbal Montoro, stated that the Catalan Government’s deficit for 2013 will not be above 2%. The Catalan Government has been asking for a 2.1% deficit target, corresponding to a third of the 6.3% that was announced by the Spanish Government as the figure allowed for Spain’s entire public sector. On Friday, several high-level meetings to discuss the issue were held in Barcelona between members of both executives. On Monday, the Spanish Prime Minister, Mariano Rajoy, stated that in his meeting with the President of the Catalan Government, Artur Mas, they did not discuss specific figures. He also stated that no figure will be decided on until the European Union officially confirms Spain’s 6.3% total deficit target.

On the occasion of the kick-off of the 2013 Barcelona International Motor Show, the Spanish Prime Minister, Mariano Rajoy, and 3 ministers (Finance, Economy and Industry) visited Barcelona on Friday. They held several meetings with the President of the Catalan Government, Artur Mas, and the Catalan Finance Minister, Andreu Mas-Colell. Mas and Rajoy talked for 20 minutes about Catalonia’s deficit target for 2013 and the budget for this year. Officially, they have not discussed the self-determination process. In addition, Mas also met with Luís De Guindos, Spain’s Minister for the Economy. Mas-Colell met with De Guindos and Cristóbal Montoro, the Spanish Finance Minister.

However, the participating political parties could not agree on a plan to organise a self-determination vote: some would like to combine the organisation of the vote with the creation of state structures while others ask for neutrality and refuse to identify self-determination as a solution to Catalonia’s economic crisis. The President of the Catalan Government and leader of the Centre-Right Catalan Nationalist Coalition (CiU), Artur Mas, called for a summit to discuss ways to obtain the right to self-determination and be able to organise a referendum on this issue. All the parties supporting self-determination, including the Catalan Socialist Party (PSC), participated in the meeting, as well as the Catalan Government, the four Provincial Councils and representatives from town halls.

The number of jobseekers registered with the Catalan Public Employment Service (SOC) decreased by 7,055 people last month, which leaves the total number at 656,995 unemployed individuals. The figure represents 21,274 more jobseekers than a year ago, an annual increase of 3.35%. In April, all the economic sectors contributed to the reduction in the level of registered unemployment. In the whole of Spain, the number of people officially registered as unemployed decreased by 0.91%, setting the total number of jobseekers below 5 million individuals (4,989,193), 46,050 fewer people than a month ago. The Catalan Government considered the April figures to be “positive” but also “insufficient”.

The CIS – the Spanish Government’s public opinion survey institute – has indicated that 55.1% of Catalans would like a Catalan state, either independent from Spain (33.7%) or within a federal Spain (21.4%). 29.4% would like to keep the Autonomous Community model and 12.1% would back recentralisation and Catalonia being a Spanish “region”. The survey was taken between September and October but the results were only released recently in early May, more than half a year later. In addition, 65.1% of the interviewees said they wanted more power for the Catalan Government.

The President of the Catalan Government announced the initiative which will aim to develop an industry and knowledge cluster of the automation sector. The cluster would profit from the multinational companies based in Catalonia, the country’s industrial sector traditionally linked to cars and bikes, the export infrastructures, Barcelona’s car fair, the Formula-1 racing circuit and the innovation, design and education centres. The new cluster is fully supported by the Catalan Government, since automation is one of the main engines driving Catalonia’s economy. It aims to strengthen the sector’s competitiveness, foster cooperation between companies, facilitate the education and training of professionals, develop innovation and implement strategic agendas such as sustainable mobility and electrical vehicles.

The deficit target for Spain’s entire public sector has also been raised from 4.5% to 6.3%. The Spanish Government has kept 81% of the deficit for itself while it is only responsible for 50% of Spain’s public spending. The Spanish Government has allowed itself a 5.1% deficit target, while the Autonomous Communities are only allowed a target of 1.2%. The regional governments fund the basic welfare state services and manage more than 35% of Spain’s total public spending. The Catalan Government welcomes the revision but considers it not to be enough. The Catalan Finance Minister, Andreu Mas-Colell, has been insisting that the Autonomous Communities should have at least a third of the total deficit. Therefore, with an overall target of 6.3%, the Catalan Executive should have a target at least 2.1%.

47 foreign investment industrial projects, bringing in €331.88 million, landed in Catalonia last year through ‘Invest in Catalonia’, a programme from the Catalan Government. This represents 37% more investments than in 2011. The projects created 2,324 new jobs and they also allowed companies to keep 2,566 positions. Besides, the Spanish Ministry for the Economy stated that foreign investment in Spain dropped by 43% in total and by 14% in Catalonia. The Catalan Business Minister, Felip Puig, explained that the Spanish Ministry data includes financial investments. However, Puig emphasised that the Spanish Ministry’s report also states that industrial and manufacturing investments in Catalonia increased by 6.2% and 11% respectively.

In an official visit to Brussels where the President of the Catalan Government, Artur Mas, met with three Commissioners, he recognised that the European Union institutions view Catalonia’s self-determination “with great respect” but they have “some concerns” about “the potential independence” from Spain. Mas emphasised that Catalonia is too significant and relevant “not to be taken into account”. Therefore, the EU “is interested in providing Catalonia with stability” and to “not turn their backs on the Catalans’ majority public opinion”. Mas celebrated that at an international level “instead of closing the door, they listen to us”, which “is different” to the Spanish Government’s attitude.

The new tax would not affect individual citizens neither would it be implemented in areas without housing demand. The tax aims to put apartments and houses, owned by banks and real estate companies that remain empty despite being in areas with a demand for housing, back on the market. The expected effect is an increase in the amount of housing on offer in those areas and to make renting cheaper. The Catalan Minister for Public Works, Santi Vila, announced the new tax on Monday morning. A few hours later, the Catalan President confirmed they are considering it, although no final decision has been made. The Left-Wing Catalan Independence Party (ERC) stated that the measure was part of the agreement reached with the Centre-Right Catalan Nationalist Coalition (CiU).