Catalan parties are vigilant regarding the Spanish Constitutional amendment limiting public deficit and debt

Many in Catalonia fear that a constitutional limitation to public deficit and debt may dramatically reduce Catalonia’s already restricted fiscal autonomy, which would not only affect self-governance but also the possibility to pay for investments or public services not guaranteed by the Spanish State. The fear goes beyond Catalan party boundaries regarding the second amendment to the Spanish Constitution, which would be approved through an “urgent procedure”, almost without public and political debate. Catalan senators could force a call for a binding referendum.

CNA / Gaspar Pericay Coll

August 25, 2011 10:28 PM

Barcelona (ACN).- The possible amendment to the Spanish Constitution to limit public deficit and debt affecting all public administrations worries most of the Catalan parties. The debate in Catalonia is not so much about Keynes’ thesis versus Merkel’s, but about the actual need for such a measure, which limits strong state interventions. The main debate is about the fear that the Constitutional amendment agreed between Spain’s two main parties could also be used to reduce the already limited fiscal autonomy of Catalonia. Why is this a fear? Because Spain’s two main parties –the Socialist Party (PSOE) and the People’s Party (PP)– are the political home of Spanish nationalism, which has a constant desire to homogenise Spain under a Castilian matrix, concentrating all power in Madrid. The agreement between the PP and the PSOE is the foundation for the second amendment to the Constitution, which was approved in 1978 after four decades of a Fascist dictatorship and negotiated among all political sensitivities in Spain, from Communists to Fascists, from Spanish nationalists to Catalan nationalists. In addition, the proposed Constitutional amendment would be approved as an urgent procedure, almost without public and political debate, and without a referendum. It could thus be passed only with the votes from the two main parties, undermining the rest of the political sensitivities. However, this could change as 23 Catalan senators could block the procedure and thus forcing a binding referendum if they get the support of just three other senators. It all depends on the actions of the Catalan Socialist Party (PSC), which is part of the PSOE and supports Prime Minister Zapatero. The PSC has not announced its stance yet, not as the rest of the Catalan parties. All Catalan nationalist parties oppose the amendment and emphasise the importance not to reduce Catalonia’s fiscal autonomy. From a pro-Catalan point of view, fiscal autonomy cannot be reduced because, despite already being quite limited, it is the main tool to pay for the investments and public services not made or guaranteed by the Spanish State in Catalonia and to counter-act centralist policies driven by Spanish nationalism. The constitutional amendment is thus perceived by these parties as a risk to Catalonia’s self-governance but also to its economy and social welfare.

After the Spanish Prime Minister proposed last Tuesday an amendment to the Spanish Constitution for the second time in history (the first one was to allow European citizens to vote in municipal elections after the approval of the Maastricht Treaty) in order to include a public deficit limitation affecting all public administration, and knowing that the measure had been previously agreed with the People’s Party, a cascade of public statements was launched in Catalonia, but also throughout Spain, in particular within PSOE strongholds. Criticism within the PSOE across Spain is more linked to the measure itself, whose need has been repeatedly preached by neoliberalists and critics of state intervention in the economy. However, Left-Wing supporters have serious doubts about including such principle in the Constitution. Furthermore if it is passed as an urgent measure, it will impede debate, less than three months before the general election.

The PSOE candidate to the next election Alfredo Pérez Rubalcaba said on Tuesday that he had been informed about the announcement in advance and supported it, as the current economic situation requires the adoption of methods to cool down the markets. Nevertheless, Rubalcaba is perfectly aware that depending on the terms of the measure and the manner in which it is passed, he could loose his Left-Wing support, damaging any possibility to reverse polls and beat the PP in November. Therefore, Rubalcaba has decided to actively participate in the negotiations and get the largest possible base for the agreement, which means on one side contenting Left-Wing voters and peripheral nationalists. The possible way out is by not approving a concrete figure for the limit, including flexibility criteria regarding potential difficult scenarios and ensuring that the State will not balance its budget at the expenses of the Autonomous Community ones.

Since Spain is not technically a federal country, the State could transfer its deficit to the Autonomous Communities or could require the Autonomous Communities to tighten their belt while the State spending is not reduced in proportion. Fearing this possibility, most of the Catalan parties are vigilant, raising their voices and sending messages that a reduction of Catalonia’s self-governance will not be accepted. The main debate in Catalonia is therefore not so much focused on public powers’ role within the economy and what Constitutions are for, but on the fear that the measure will finally trim Cataloania’s self-governance. The issue goes beyond party boundaries.

The debate in Catalonia

After Zapatero’s announcement backed by the PP, the Catalan Government was on guard. The spokesperson for the Catalan Executive, Francesc Homs, who is also a key person within the Centre-Right Catalan Nationalist Coalition ‘Convergència i Unió’ (CiU), stated that Catalan parties should frontally oppose the measure. Some hours earlier and directly answering to Zapatero at the Spanish Parliament, Josep Antoni Duran i Lleida, the CiU’s strong man in Madrid, explained that “the spirit” of the new measure to balance budget and control excessive public spending was shared by its group. Actually the CiU has cut the Catalan Government’s spending by 10% this year to reduce the deficit. However, Duran emphasised that before deciding if the CiU was giving support to this measure he had “to read the small print”. The details of the amendment are still unknown partly because Zapatero’s announcement was vague and because the details are in fact still being discussed. This Thursday, the Catalan Government’s Vice President, Joana Ortega, underlined that the statements made by Homs and Duran, both from CiU, were along the same line; guaranteeing Catalonia’s fiscal autonomy.

CiU could vote for the amendment if Catalonia’s fiscal autonomy is guaranteed

Duran has been negotiating with the PSOE and the PP and according to sources from the CiU who talked to the CNA this Thursday afternoon, the CiU would vote for the constitutional amendment as long as there are no concrete figures and only if the measures do not limit the Autonomous Community fiscal autonomy. However negotiations are still on going. Yesterday, the Catalan Minister for Finances, Andreu Mas-Colell, said to share the need to limit the deficit “if Germany wants so”, but that “as member of the Catalan Government, I would like this limit to be fixed by the Catalan Parliament”, not the Spanish one.

The PSC receives pressure to force a binding referendum

The main opposition party in Catalonia is the Catalan Socialist Party (PSC). The PSC is part of the Spanish PSOE and supports Zapatero. Although the PSC has some degree of independence in relation to the PSOE, most of the time they vote in line with the PSOE and many Catalans consider them to be the exact same thing. At the Spanish Senate, the PSC is not within the PSOE group but its senators form a group with those from the Left-Wing Catalan Independence Party (ERC) and the Catalan Green Socialists (ICV-EUiA). Since the constitutional amendment should not only be approved by the Parliament but also by the Senate, the 11 senators from the PSC could vote with the rest of the Catalan senators, opposing the PSOE standpoint. If all the 23 Catalan Senators from the CiU, PSC, ERC and ICV-EUiA get the support of only 3 other senators (for instance some from the Basque Country or the Canary Islands), thus getting 26 votes, they could oblige the amendment to be approved by a binding referendum. The PSC therefore holds the key to obliging the Spanish Constitution amendment to limit public deficit and debt to be approved through a binding referendum and not simply through a mere parliamentary procedure. For the moment, the PSC has not announced its official stance, as it says to wait for the measure's details, which are still being negotiated. However, leading members of the party with a pro-Catalan profile have warned that the measure cannot go against Catalonia’s interests and trim Catalonia’s self-governance. Tarragona’s Mayor, Josep Félix Ballesteros, said that the amendment should also be used to guarantee local government funding.

Other parties

The remaining two other Left-Wing parties of the Catalan political spectrum have been much more vocal. The ICV-EUiA, an eco-socialist coalition including former Communist parties, has typically been the party that has focused more on the Left-Right debate, than on the Catalonia-Spain one. The ICV’s President, Joan Herrera stated that the amendment is “a financial coup d’état” and asked all MPs and senators “with a social-democrat sensitivity” to ask for a binding referendum. Herrera put pressure on the CiU and PSC to agree to lead a Catalan front and oblige the amendment to go through the citizens’ vote. In addition, Herrera also underlined that the measure cannot in any case reduce Catalonia's self governance.

The Left-Wing Catalan Independence Party (ERC) is also against the amendment because “it limits Catalonia’s self-government” and it thus “goes against Catalonia’s interests”, said Oriol Junqueras, the ERC’s next President. Junqueras announced he would support the Catalan Government, run by the CiU, if “it defends the greatest possible levels of sovereignty”. He also added that “Catalonia does not need to be lectured by anyone”, as it is already going through “harsh budget adjustments”. He stressed that Catalonia’s largest financial problem is the fiscal deficit –the money that Catalonia gives each year to the rest of Spain in terms of solidarity– which he said was 20,000 million euros per year (12% of Catalonia’s GDP). Furthermore, Joan Tardà, the ERC’s deputy spokesperson at the Spanish Parliament, asked for a symbolic action. He asked all the Catalan MPs to exit the plenary when the amendment is being voted on.

However, the spokesperson for the Catalan branch of the People’s Party, Enric Millo insists that limiting the public spending within the Spanish Constitution “does not limit the financial autonomy” of Catalonia if, “we understand it as the management of our own resources”,. He said that the “recently suffered dynamics” where “more money than we had was being spent” must be avoided.