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Artur Mas, the President of the Catalan Government and leader of the Centre-Right Catalan Nationalist Coalition (CiU), is sceptical about the Spanish Executive’s desire to find a negotiated solution regarding Catalonia’s self-determination claims. Asked about the possibility of giving up the self-determination agenda in exchange for more economic resources for the Catalan Executive, Mas stated that “the Spanish Government will not exchange a better fiscal scheme for the self-determination vote”. However, he insisted that public finances are in “an emergency situation”. Therefore, he offered again for the Catalan Independence Party (ERC) and the Catalan Socialist Party (PSC) to sit in the Cabinet because “the situation requires adding strength” in order “to guarantee the survival of Catalonia’s self-government”.

In early November, the Catalan Government decided to allocate the public tender privatising the service of the publicly-owned Aigües Ter-Llobregat – which supplies water to the 5 million people of Greater Barcelona – to a joint venture led by Acciona. This meant that the Catalan Executive cashed in €300 million in 2012 and €700 million was to be split over the next 50 years. The operation was aiming to reduce public deficit. However, Agbar appealed the tender because it thought that Acciona was not fully respecting the terms of reference. Now the Court have backed Agbar’s view and cancelled the tender. Acciona has already announced that it will appeal to the Spanish Supreme Court and, in the case that it loses the concession, it will sue the Catalan Government for damages, since the contract came in to effect on the 1st of January.

According to Catalan and Spanish Government sources, the Spanish Prime Minister, Mariano Rajoy, and the President of the Catalan Executive, Artur Mas, secretly met this week in Madrid. They mainly talked about the deficit targets for 2013 and Catalonia’s self-determination process. It is the first time they have held a meeting in the last 6 months. On the first issue, they agreed on the need to relax the current 0.7% deficit objective, which would oblige the Catalan Government to carry out a budget adjustment of almost €4.5 billion. No specific figure has been decided on, but Mas said that it will be between 1.5% and 2%, depending on the European Union’s decision regarding Spain’s total deficit. Regarding the self-determination vote, they see things very differently and Rajoy continues to refuse to allow such a vote.

The Institut Català de Finances (ICF), the Catalan Government’s financial institution which offers credit, announced that it gave €1.7 billion in loans to 8,500 companies over the last two years in an Action Plan. The plan’s main objective is to foster economic activity and prevent companies from going bankrupt due to liquidity issues. 98% of those who received loans were SMEs and independent workers. The ICF’s Action Plan had the objective of injecting liquidity into the real economy, into the Catalan business network, while the private banks are going through their restructuring process and access to credit is particularly difficult for many companies.

The Spanish Finance Minister, Crístobal Montoro, confirmed that if Brussels relaxes Spain’s total deficit target for 2013, he will share this flexibility with the Autonomous Communities’ governments. A working group has been created to analyse the most convenient formula for this, including that of setting different deficit targets for each Autonomous Community. The Catalan Government celebrated the decision, since it has been asking for it for many months. In addition, the Catalan Finance Minister, Andreu Mas-Colell, stated that he will look for “a smooth relationship” with the Spanish Executive to negotiate the details. On Wednesday, Mas-Colell proposed the idea that deficit targets could be set according to debt levels. In the last few days, the Catalan Government has sent several messages in order to show a willingness to talk to Rajoy’s cabinet about the most important subjects on the table.

The Catalan Government’s grant will be reduced by 14% and revenue from advertising is expected to decrease by 10%. The budget reduction has been approved with loud protests from the workers, since it will mostly affect labour costs, which may plummet by 18%. Since 2010, the production and investment budget has dropped by 50%. The Catalan Public Television Broadcaster’s main station, TV3, has been clearly leading audience rankings in Catalonia for most of the years since its creation in 1983. The majority of the political parties and citizens in Catalonia support strong public television and radio stations. The idea of reducing the TV3 budget has been constantly presented by Spanish nationalists as the way to reduce Catalonia’s public deficit despite the €225 million public grant only representing 5% of the total budget adjustment to be accomplished in 2013.

The Supreme Court of Catalonia (TSJC) has indicted Oriol Pujol, who is the ‘number three’ of the CiU – who run the Catalan Government – over a case of influence peddling regarding an irregular public tender for technical vehicle inspection garages. After his indictment was announced, Pujol “delegated” his party and parliamentary roles as Secretary General of CDC – the Liberal and largest force within the two-party coalition CiU – and as Chairman of the CiU group in the Catalan Parliament. However, Pujol explained that he would not resign as an MP, as it would be “out of proportion”. The Catalan politician insisted that he was innocent and he hoped justice would act quickly. The opposition has displayed a divided reaction: some parties have left it to the CiU to decide whether Pujol’s decision was enough while others heavily criticised him continuing as an MP.

The Catalan Finance Minister, Andreu Mas-Colell has announced that the Catalan Government had a public debt of €50,948 million on the 31st of December, 2012. Catalonia’s debt has increased by €16 billion in only 2 years due to the financial crisis. Furthermore, in 2013, the Catalan Government will have to pay €2.2 billion in interest on the debts – equivalent to 8% of its budget and 1% of Catalonia’s annual GDP. Catalonia has been a net contributor to the European Union for decades and has been paying around 8.5% of its annual GDP – equivalent to €17 billion – every year for services and infrastructure in the rest of Spain. Despite this fact, the Catalan Government does not receive enough money from the Spanish Executive, which raises most of the taxes and distributes revenue among Autonomous Communities.

The Catalan Parliament has approved the same declaration that the Spanish Parliament rejected 2 weeks ago with 104 votes out of the 135 MPs. The text urges the Spanish and Catalan governments to talk and agree on the organisation of a legal self-determination vote in Catalonia. The Catalan Socialist Party (PSC) presented the proposal, which also received the votes from the Centre-Right Catalan Nationalist Coalition (CiU) – which runs the Catalan Executive, the Left-Wing Catalan Independence Party (ERC) and the Catalan Green Socialist and Communist Coalition (ICV-EUiA). The radical left-wing and independence party (CUP) abstained. The People’s Party (PP), which runs the Spanish Government, and the anti-Catalan nationalism Ciutadans (C’s) opposed the vote.

A few hours earlier, the Swiss bank Lombard Odier stated that the Catalan presidents Artur Mas and Jordi Pujol do not have any relationship with the company. The Spanish nationalist newspaper ‘El Mundo’ published a report 9 days before the Catalan elections, with the official stamp of the Spanish Police on it, accusing the incumbent President of the Catalan Government, and candidate for re-election from the Centre-Right Catalan Nationalist Coalition (CiU), Artur Mas, of having secret accounts in Switzerland. The fake report also incriminated Mas’ family, the former Catalan President Jordi Pujol and two of Pujol’s sons. The report completely altered the election campaign. Now, four months after the report was issued, the Catalan Government has demanded a public rectification since some Spanish Ministers and leading members of the People’s Party validated the report at the time.

Andreu Mas-Colell, the Catalan Government’s Finance Minister, emphasised that a 0.7% deficit objective means implementing an additional budget adjustment of €4.4 billion. This amount represents around 15% of the Catalan Executive’s budget for last year, which had already been reduced over the previous two years. Furthermore, expected revenue will decrease by 1% despite increases in tax, debt interest will grow by €300 million and the amount of spread payments will also increase by €150 million. In such circumstances a €4.4 billion one-year adjustment would blow up public services in Catalonia. Therefore, Mas-Colell urged the Spanish Government to find an agreement, as otherwise no one wants PM Rajoy to act “as the viceroy of Catalonia”.

The Spanish Government has presented its project to approve an External Action Law aiming to “centralise services” and to have the Autonomous Communities’ external action “coordinated and subordinated” to the principles and objectives of the Spanish Foreign Affairs Ministry. The Spanish Foreign Affairs Minister, José Manuel García-Margallo, has “invited” the Autonomous Communities to integrate their teams into those of the Spanish embassies. However, he also recognised that many Spanish embassies and consulates lack business services to assist companies and attract foreign investment. The Catalan Government’s offices abroad are mostly focused on these economic objectives.

The President of the Catalan Government, Artur Mas, accused the Spanish Government of “not having the true will to talk” about Catalonia’s self-determination claims, backed by democratically-expressed ballots. After the weekly Cabinet Meeting, the Deputy Prime Minister, Soraya Sáenz de Santamaría, confirmed that the Spanish Government will take the Catalan Parliament’s declaration, which states that the Catalan people are sovereign to freely and democratically decide on their collective future and therefore organise a self-determination vote, to the Constitutional Court. The Spanish Government justified its decision by stating that the declaration – with no direct legal impact – might have legal consequences and wants the Court to “clarify that the Catalan people are not sovereign”.

Catalan companies at the Mobile World Congress increased their presence in the international event by 40% in comparison with 2012. 56 companies were supported by the Catalan Government, which grouped 48 of them together under the Catalonia Stand. They also introduced to the technologic market new apps in different fields and closed deals with other international companies. Most of them are formed by small teams of young entrepreneurs who were looking for venture capital and were making contacts with international businesses to launch their latest technological projects.

The Catalan Government has reduced its deficit by half over the last year, dropping from a 4.02% figure to a deficit of only 1.96%. However, despite the significant reduction, the figure is still above the 1.5% target unilaterally imposed by the Spanish Government. The Catalan Executive had been warning the Spanish Government that a 1.5% target was not realistic, as it did not relate to its spending responsibilities managing the basic Welfare State services. The Autonomous Communities had a total deficit of 1.73%. Spain as a whole ended 2012 with a 6.74% deficit, according to the Spanish Finance Ministry, over the 6.3% target imposed by Brussels. The Spanish Government posted a final deficit of 3.83%; Social Security – managed by the Spanish Government – had a 0.96% deficit and local governments a deficit of 0.2%. Barcelona City Council ended up with a budget surplus of €117 million.