Politics

The Catalan Government stated it will meet the 1.5% deficit target for the Autonomies, although it considers it to be abusive considering they manage the main public services and the Spanish Government has kept for itself all the flexibility allowed by Brussels. In addition, the Catalan Government and the Catalan economy suffer from a perpetual lack of investment by the Spanish Government, which takes away 8.5% of Catalonia’s GDP each year, a quantity much higher than the deficit target. The day after Catalonia’s request for €5 billion from the Liquidity Fund, there was no recognition of Catalonia’s fiscal deficit at a Spanish or European level. There were only calls to continue with the austerity efforts. However, the Catalan Government warns of a “serious problem” if the Liquidity Fund is not in place on time by September.

The Spokesperson for the Catalan Government emphasised the money requested comes from Catalan taxpayers, since Catalonia pays €17 billion each year for services and investments in the rest of Spain. Nonetheless, the Catalan Executive stated it will meet the deficit targets and will follow the already approved austerity plan. The Spanish PM and leader of the People’s Party (PP) confirms it will “help Catalonia as we help the other Autonomous Communities”. However, the PP Spokesperson in Catalonia said the Catalan Government will have to accept whatever the conditions are. The Catalan Socialists want to know what the €5 billion will be spent on before supporting the decision. The Catalan Independence parties criticised the decision for having given away Catalonia’s autonomy.

Answering a letter from the Catalan President, the Spanish Prime Minister, Mariano Rajoy, stated he would study the proposal voted by the Catalan Parliament which aims to reduce the solidarity contribution from Catalonia to the rest of Spain and have all taxes raised by a Catalan-run agency. However, Rajoy had previously stated this issue was out of discussion, especially in the current economic context. A vast majority of the Catalan Parliament considers that it is precisely due to the financial stress provoked by the crisis that it is urgent to debate the excessive transfer of revenues from Catalonia to the rest of Spain. The Spanish PM also stated he has agreed to meet with the Catalan President to discuss this proposal, but he expects to talk about many other issues.

The ‘number two’ of the Centre-Right Catalan Nationalists (CiU), Josep Antoni Duran i Lleida, immediately replied that the Spanish Government is “the one creating mistrust” because of “its discrepancies” and Mariano Rajoy’s “absenteeism”. He also criticised the Spanish Government for not putting in place an action plan to promote employment, “despite having the tools to do so”. Soraya Sáenz de Santamaria, the Spanish Government’s Deputy Prime Minister and Spokesperson, has blamed Catalan and Basque nationalisms for “promoting a climate of instability”. They create “mistrust and insecurity”, which “keeps away foreign investment” and “job creation”, said Sáenz de Santamaria the week Basque elections have been announced.

The trade union UGT has calculated that 478,969 jobs have been destroyed in Catalonia between the June 2007 and June 2012. Furthermore, the union fears a “layoff avalanche” next autumn in the public sector.

The Spanish Social Security has published the list with the 417 drugs that from September will no longer be subsidised in order to reduce public spending and meet deficit targets. Most of them are some of the most consumed medicines for minor symptoms, such as heartburn, muscle pain, or diarrhoea. Since the measure is not popular among doctors, the Catalan Health Minister, Boi Ruiz, said that more expensive drugs with similar effects but not included in the list may now be prescribed, which would increase pubic healthcare spending instead of reducing it.

The President of the Catalan Government, Artur Mas, also talked about the delays of August payments to social care organisations, and he “hoped to be in a better situation” next month. However Mas could not give “a total guarantee” as it depends on whether the Spanish Government activates the Liquidity Fund for the Autonomies. In fact, Mas urged the Spanish Government to do so at the end of this month and said it is “illogical” to make a grand announcement about the measure and then not implement it.

The Catalan Government will allow universal access to community health centres, despite the Spanish Government’s decision. Autonomous Communities are those managing the public healthcare system. After announcing that immigrants would not be able to access the service without contributing to the Social Security system, the Spanish Government is now preparing formulas allowing them to continue accessing the public healthcare system if they pay the fee. The Spanish Health, Social Services and Equality has confirmed that foreign people less than 65 years old will pay €710 per year and those older will pay €1,860. Access will be free in emergencies as well as for pregnant women and minors.

The Spanish Prime Minister, Mariano Rajoy, has announced further budget cuts for 2013 and 2014, totalling an additional €89.1 billion. These budget cuts are to be added to those implemented between 2010 and 2012. Autonomous Communities will have to cut their budget by an additional €19 billion in 2013 and 2014, which is added to the €15 billion already announced in Spring affecting education and healthcare. However, no details of the €19 billion plan were provided. Rajoy stated that in 2014 the Spanish economy will grow by 1.2%, leaving the recession behind. With this plan, Spain’s public deficit for 2013 will be set at 4.5% and at 2.8% for 2014.

The Catalan Social Affairs Minister, Josep Lluís Cleries, stated before the Catalan Parliament that €70 million had not been paid on time to health and social care organisations this August. He said he was sorry for the situation but underlined that the €50 million destined for private citizens had been paid. The Catalan Finance Minister, Andreu Mas-Colell, emphasised that, if the Spanish Government does not activate the Liquidity Fund for the Autonomous Communities and similar measures, he cannot guarantee the situation will not be repeated in the future. However, he said to be confident the Spanish Government will put these mechanisms in place soon. The Left-Wing opposition parties had requested the urgent hearings.

The Catalan Minister for Territory and Sustainability, Lluís Recoder, has emphasised that “not attending a meeting as a protest does not mean not honouring the agreements”. Recoder was answering the Spanish Finance Minister, Cristóbal Montoro, who emphasised that all the Autonomies are obliged to meet the deficit and debt targets. Recoder said that Montoro’s words were not appropriate and unfair, since Catalonia has been leading austerity reforms and budget cuts in Spain.

Andalusia quits the meeting after one hour. For the first time in democracy, the Catalan Finance Minister did not attend the Fiscal and Financial Policy Council (CPFF), where the Autonomous Community governments and the Spanish Executive discuss the regions’ financial situation and funding. Catalonia refused to attend the CPFF as decisions were taken beforehand by the People’s Party, which runs the Spanish Government and most of the Autonomies for which CPFF decisions are binding. In addition, the Catalan Finance Minister refused to attend the meeting due to Spanish Government’s unilateral decision to oblige the Autonomies to meet a stricter deficit target in 2013, passing from the planned 1.1% to 0.7%. He sent a letter asking for the same flexibility the European Union is giving to Spain.

According to the Barcelona Chamber of Commerce, if Catalonia continued contributing to Spain’s fiscal redistribution scheme but it did so to a lesser extent, Catalan public finances would have no deficit and Catalonia’s public debt would be much smaller. The Chamber reminded that Catalonia is giving 8.6% of its GDP each year to the rest of Spain in terms of solidarity, an amount that has no other equivalent in Europe. In addition, the Chamber emphasised that this contribution is “excessive” as basic services and infrastructures in Catalonia are not properly funded.

Catalan political parties, business associations, and many citizens are outraged by the decision to increase toll prices in Catalonia, while in the rest of Spain there are many toll-free highways. The Catalan Transport Minister asked the Spanish Government to implement a “soft toll” throughout Spain, instead of increasing toll prices in Catalonia. He reminded that for some journeys within Catalonia, there are no free of charge alternatives to the tolled highways. Catalan nationalists see this measure as a new proof of Catalonia’s high fiscal deficit, paying much more to the rest of Spain than what it gets in return. The People’s Party (PP), running the Spanish Executive, asked the Catalan Government to reduce the price of its tolls.