Politics

The President of the Catalan Government and leader of the Centre-Right Catalan Nationalist Coalition (CiU) is organising a summit to define new initiatives against corruption. The meeting will be held next week and will gather together the main representatives of the Catalan Parliament, the Supreme Court of Justice of Catalonia, the Catalan Ombudsman, the Catalan Court of Audit and the Anti-Fraud Office of Catalonia. Political parties are not invited, as the summit is thought to be “complementary” to Parliament’s actions. The Catalan President will ask the attendees to provide him with ideas so that he can channel them and put them on the table for a wider debate. In the last few months, many corruption scandals have affected politicians in Catalonia and the rest of Spain.

The President of the Catalan Government, Artur Mas, and the King of Spain, Juan Carlos I, met on Thursday for the first time since Mas was re-elected president and the Catalan Parliament approved a Declaration of Sovereignty of the People of Catalonia. The meeting lasted 45 minutes and none of the participants officially commented afterwards. However, Mas, once in Barcelona, referred to it during a literary prize ceremony. The Catalan President underlined that “we will always have to go and explain ourselves” regarding Catalonia’s self-determination process. According to him, this proves Catalonia’s “willingness to always talk”. Besides, Mas also explained to the monarch that the current deficit targets imposed on the Autonomous Communities are not allowing them to guarantee the Welfare State.

Andreu Mas-Colell, the Catalan Finance Minister, has sent a letter to the European Commissioner for Economic and Monetary Affairs, Olli Rehn, to denounce the fact that the Spanish Government is proportionally imposing much stricter deficit target on the Autonomous Communities than that of the Spanish Executive, obliging them to implement a much larger and faster adjustment. In 2013, the Spanish Government allowed itself a 3.8% deficit target and imposed an objective of 0.7% on the Autonomous Communities. In Spain regional governments manage 36% of the total public spending, including the main public services such as healthcare, education and social affairs. The Catalan Government manages an even larger share, as it has more devolved powers.

On Monday the Spanish Minister for the Economy, Luís de Guindos, stated that Spain might internally redistribute its total deficit target among the different government levels in order to give more breathing space to the Autonomous Communities, which have been taking on a large part of the budget adjustment. However, the following day, the Spanish Finance Minister, Cristóbal Montoro, ruled out this possibility if Brussels does not give greater flexibility to Spain and increase its total deficit target for 2013. On Wednesday, after the contradictory messages, the Spanish Prime Minister, Mariano Rajoy, confirmed Montoro’s approach. In 2013, Spain has been given a total deficit target of 4.5%: 3.8% is for the Spanish Government (responsible for 50% of public spending) and 0.7% is for the Autonomous Communities (responsible for almost 40%).

The Catalan Government criticised the Spanish Executive’s obstacles to Catalonia’s own external relations action, as “in a globalised world” this “is not a caprice”, but essential to be recognised at an international level and to attract foreign investment. The Catalan Minister for the Presidency, in charge of External Relations, Francesc Homs, criticised the Spanish Government’s “old-fashioned” way of understanding diplomacy and gave the example of spending in 2012 “€330,000 on cutlery and table cloths”. Homs emphasised the main commercial focus of Catalonia’s external offices and their “modesty”. The Catalan Government has a total of 5 political representation offices – including for the European Union – and 34 commercial offices.

The Catalan Government has been insisting on the need to internally redistribute deficit objectives in Spain, splitting them in a fairer way in order to better pair the responsibility of the management of basic services with their share of Spain’s total deficit target. Currently, the Spanish Government is keeping most of the deficit allowed by the European Union for itself, despite the fact that it only represents 50% of Spain’s total public spending, and it has forced regional and local governments to a Draconian budget adjustment. The European Parliament asked EU Member States to internally split deficit targets in a fair way for the benefit of the public services aimed at the citizens. Now, the Spanish Ministry for the Economy, Luis de Guindos, talked about distributing deficit targets “equitably”, in front of the European Commissioner for Monetary Affairs, Olli Rehn.

The number of unemployed people had reached 885,000 individuals by the end of 2012, a record high, with 110,000 more jobseekers than a year ago. This means that Catalonia’s unemployment rate increased from 20.5% to 23.9% in the last twelve months, breaking the previous record of 22.8% from the third quarter of 1985. In the whole of Spain, unemployment reached a rate of 26%, while a year ago it was 22.85%. It increased by 13.1% over the last twelve months, adding 691,700 more jobseekers to the list. Spain reached a historical high of 5.97 million people being unemployed.

The Parliament of Catalonia has approved an historical declaration of sovereignty claiming the right to self-determination by the Catalan people. The full text is included in this news item. The declaration paves the way for the organisation of a self-determination referendum on Catalonia’s future within Spain and its hypothetical independence. It was supported by 66.4% of the MPs who voted, representing 63% of the total parliament. These supporters came from 4 different groups. 2 MPs abstained because the declaration does not include other Catalan-speaking territories and five Socialist MPs did not vote as a protest because their party is officially opposed to the declaration. Those opposing the declaration included 32% of the MPs who voted, representing 30.4% of the total chamber.

The association’s People’s Rights Commission defends the celebration of a referendum and the unilateral independence declaration if the Spanish Government insists in not allowing a citizen vote on the issue. While is it true that the current Spanish Constitution does not allow for a self-determination referendum, the Barcelona lawyers' association argues that “in a democratic society, the law should be the expression of the people’s choice”, and therefore it should be modified accordingly to allow the referendum. It also highlights that 20 of these states are the result of secession, such as Norway, Finland, Ireland, Iceland, Lithuania, Estonia, Latvia, Slovenia or Montenegro.

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.

The Spanish Government is keeping most of the 4.5% public deficit allowed to the entire Spanish public sector in 2013 for itself, despite managing only 50% of the total public spending. It has allowed itself a 3.8% deficit while it has imposed a 0.7% target on the regional governments, which manage almost 40% of the public spending including basic services such as healthcare and education. The European Parliament report indirectly asks Madrid to relax the Autonomous Communities’ deficit targets according to the basic services they provide. In addition, it also states that regional governments should have greater fiscal capacities and depend less on central government transfers. Furthermore, the report asks “some member states” to eliminate the ministries whose powers have been devolved and to “reduce unnecessary defence expenditures”.

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.

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.

The Spanish Government has finally finished the construction work and circulation tests on the last 131-kilometre stretch of railroad to France. Barcelona, Girona and Figueres are now linked by High Speed Train, although a direct connection between the Catalan capital and France will have to wait until next April. Now, passengers can travel from Barcelona to Girona in only 37 minutes and to Figueres in a total of 53 minutes. If they want to continue to France, they will have to switch trains until April, when the Spanish trains will be standardised to be able to run in France. However, from now on, the Spanish and the French High Speed railway networks will finally be connected, twenty years after the Madrid-Seville line was unveiled. The Catalan President has emphasised that Catalonia is the Autonomous Community with the smallest amount of public infrastructures in Spain.

The Spanish Prime Minister, Mariano Rajoy, has accepted the offer sent by the new Catalan President to talk about Catalonia’s claims, while keeping them “always within the Constitution”. Furthermore, he has rejected the possibility of modifying the 0.7% deficit target imposed on the Autonomous Communities for 2013. The Catalan Finance Minister, Andreu Mas-Colell, explained that, if the payment of financial interest is excluded, meeting next year’s 0.7% deficit target represents a budget surplus, which “makes no sense from an economic point of view in a context of recession”. Mas-Colell proposed that the Autonomous Communities meet a 1.5% deficit target in 2013, as they represent more than a third of Spain’s total public expenditure and Spain has been authorised a total deficit target of 4.5%.