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After Nissan’s announcement that Barcelona would not build its new car model, the Catalan Government and the trade unions have been trying to persuade the Japanese company to change its mind. The six-month negotiation was derailed ten days ago, when Nissan considered the talks to be over as the unions refused to sign its final proposal. However, the company has not announced where the new car will be built yet. The union representing the majority of the Catalan plant’s workers has already signed Nissan’s proposal, but the unions CCOO and UGT – the main ones in Catalonia – have insisted on presenting their own proposal, based on Nissan’s need to make reductions of €30 million. A few days ago, Nissan stated that it was too late, but now it says it will study the union’s proposal to look at the details.

If the Spanish Government had honoured its legal commitments and did not “centrifuge the deficit” towards the Autonomous Communities, the Catalan Government would have ended 2012 with a deficit of 1.53%, according to the Catalan Finance Minister, Andreu Mas-Colell. Instead, the Catalan Government had a deficit of 2.3%, 0.8 percentage points higher than the 1.5% deficit target. In any case, Catalonia’s deficit still decreased from 3.99% in 2011 to 2.3% last year, a reduction representing €3.48 billion, despite the recession, the consequent drop in tax collection and paying €1.72 billion in debt interest. In the last 2 years, the Catalan Government has reduced its expenditure by €4.2 billion, representing a daily reduction of €5.7 million.

Trade unions refused to sign the Japanese company’s final offer to increase the competitiveness of Barcelona’s plant by reducing salaries and changing working conditions, so Nissan announced the end of the talks after 6 months of negotiation and meditation by the Catalan Government. Before Christmas, the Japanese company had already warned the unions that talks were coming to an end as the production of the new sedan car needed to be allocated. Back then Nissan presented a final offer, which has however been modified in the last few days. Once the agreement seemed to be imminent, Nissan floated the idea of a two-day reduction in holiday days, which the unions immediately rejected. Nissan warned that its Barcelona plant might now face “a slow-death scenario”.

The Constitutional Court has accepted the Spanish Government’s appeal against three measures adopted by the Catalan Executive to reduce its deficit, some of them negotiated last spring with the People’s Party (PP). The Spanish Government, which is run by the PP, now believes that these measures invade its own powers, “break market unity” and go against the principle of “equality for all Spaniards”. While accepting the appeal, the Court has temporarily suspended the application of the fees and taxes for a five-month period, which could be extended. The Catalan Government will appeal the decision as it believes the measures to be in line with the Constitution and within its jurisdiction. The drug prescription fee brought in €46 million in its first 6 months and it reduced public spending on medicines.

Combined with the salary reductions and the taxation increase, the rise in inflation means that Catalans have lost purchasing power. The spending of the average Catalan family increased by some 110 euros per month compared to 2011 in order to buy the same amount of goods and services, while the net revenue decreased. In the whole of Spain, the inflation rate for the last 12 months was 2.9%, affected by the VAT increase approved by the Spanish Government. In Catalonia, it was higher due to fees adopted by the Catalan Government in order to reduce the public deficit: namely those affecting drug prescriptions and university education.

The Catalan Government has created a Treasury Secretariat within its Finance Ministry, which will be in charge of managing revenue, with the objective of developing Catalonia’s own tax office. The creation of a treasury of its own would allow the Catalan Executive to collect all the taxes generated in Catalonia, as Navarra and the Basque Country have been doing for decades. It is one of the electoral promises of the governing Centre-Right Catalan Nationalist Coalition (CiU) and is also part of the parliamentary stability agreement reached with the Left-Wing Catalan Independence Party (ERC). A Catalan tax office collecting all the taxes is an historical claim of a large part of the Catalan society. However the Secretariat created is in line with the CiU’s strategy of creating state structures and it has been criticised by the pro-Spanish unity parties.

On the 5th of December, the Catalan Executive allocated the tender to privatise the public companies Tabasa and Túnels del Cadí to the joint venture formed by Invicat (owned by Abertis) and the investment bank BTG Pactual. On Friday, the deal was completed and the Catalan Government earned €309.6 million, representing 72% of the total of the €430 million operation. In addition, the two public companies will effectively disappear. The concession will last for the next 25 years and the Catalan Government will continue to own the infrastructures but it will transfer the management and exploitation. The operation includes the tolls at the Vallvidrera highway tunnels accessing Barcelona and the Cadí tunnel, at Cerdanya County, in the Pyrenees.

The President of the Catalan Government has formed a new Cabinet with more political weight controlled by some of the people closest to him, such as Francesc Homs and Germà Gordó, who have been promoted. Half of the previous ministers will continue in the same position, such as the Vice-President Joana Ortega and the Finance Minister Andreu Mas-Colell. The new Executive combines a few Social-Democrat figures – as a gesture towards the Left-Wing Catalan Independence Party (ERC) – with members of the Christian-Democrat side of the governing Centre-Right Catalan Nationalist Coalition (CiU), in order to respect the internal equilibrium. The new Government has the objectives of organising the self-determination vote, reducing the public deficit and reactivating the economy.

Artur Mas, leader of the Centre-Right Catalan Nationalist Coalition (CiU), has sworn the oath as President of the Catalan Government again, two years after he did it for the first time. After swearing office, Mas delivered a long speech in which he asked Spain to not put the will of Catalans to freely decide on their own future “behind bars”. He also compared Spain and Catalonia’s relations with “two boats” following a “collision course”. Mas stated that he is ready “to change direction” because otherwise “Catalonia will be adrift, and when you are adrift, you are the most likely to crash against the rocks”. The Spanish Finance Minister, Cristóbal Montoro, was present at the ceremony as the highest representative of the Spanish Government.

The Catalan Parliament has voted Artur Mas, leader of the Centre-Right Catalan Nationalist Coalition (CiU), in as President of the Catalan Government with the votes of his own group and those of the Left-Wing Catalan Independence Party (ERC). Mas has been re-elected in the first vote with an absolute majority of 71 affirmative votes from the 135 MPs. The rest of the opposition voted against him for two different main reasons: either because they opposed the budget cuts despite supporting the organisation of a self-determination referendum or because they opposed Catalonia’s self-determination altogether. Mas based his campaign on two main pillars: fighting the economic recession and the public finance crisis and pursuing “Catalonia’s national transition”.

The leader of the Centre-Right Catalan Nationalist Coalition (CiU) and candidate for re-election to be President of the Catalan Government, Artur Mas, stated that he will keep the offer he made to the other parties supporting the celebration of a self-determination vote to join the government open until the end of the legislative term. The offer is due to “the hardness of the situation and the magnitude of the challenges to be faced”. The challenges are “the worst part of the economic recession”, “the crisis of public finances” and “the country’s greatest political operation of the last three centuries”. He also called for a summit to agree on the “impassable limits” of the Welfare state, as further budget cuts will be required.

The Spanish Education Minister, José Ignacio Wert, refuses to modify his Education Reform that will relegate the Catalan language in schools and re-centralise power. However, “technical improvements” could be included during the parliamentary debate. The Catalan Government “totally rejects” the current proposal as Wert “has not changed a single comma” despite the talks. Wert, famous for stating two months ago that he wanted “to Hispanicise Catalan pupils”, is pushing for a reform that will break Catalonia’s education model, which has been in place for more than 30 years. The Catalan school model guarantees knowledge of both Spanish and Catalan and it has been praised for fostering bilingualism and social cohesion by international organisations. The reform faces strong objections in Catalonia.

Artur Mas, the leader of the Centre-Right Catalan Nationalist Coalition (CiU), and Oriol Junqueras, President of the Left-Wing Catalan Independence Party (ERC), have signed the parliamentary stability agreement, which includes the call for a self-determination vote by citizens and the modification of taxation in order to increase revenue. Mas will be re-elected President of the Catalan Government and the ERC will not sit in the Executive but will offer parliamentary support on the agreed issues. The CiU and the ERC are asking for other parties to add their support to the self-determination vote. In addition, they have stated that the taxes created with the sole aim of collecting more money will be temporary. Despite the electoral mandate, the Spanish Government totally opposes the referendum and is threatening the Catalan Executive with economic asphyxia.

The Spanish Education Minister, José Ignacio Wert, refuses to modify his Education Reform that will relegate the Catalan language in schools and re-centralise power. However, “technical improvements” could be included during the parliamentary debate. The Catalan Government “totally rejects” the current proposal as Wert “has not changed a single comma” despite the talks. Wert, famous for stating two months ago that he wanted “to Hispanicise Catalan pupils”, is pushing for a reform that will break Catalonia’s education model, which has been in place for more than 30 years. The Catalan school model guarantees knowledge of both Spanish and Catalan and it has been praised for fostering bilingualism and social cohesion by international organisations. The reform faces strong objections in Catalonia.

The Centre-Right Catalan Nationalist Coalition (CiU) and the Left-Wing Catalan Independence Party (ERC) have reached a definitive agreement ensuring the next Catalan Government parliamentary stability to approve the main laws. The CiU leader Artur Mas will be re-elected President of the Catalan Government with the ERC’s vote in the Catalan Parliament by the end of the week. However, the ERC will not sit in the Cabinet and will only offer support on the agreed issues. The last point blocking the agreement was the CiU’s refusal to set a specific date for a self-determination referendum. Finally, they have agreed on calling for a citizen vote on Catalonia’s independence from Spain in 2014. However, the CiU has managed to include a clause postponing the voting call if both parties explicitly agree to do so.