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Spanish Government delays once again the publication of territorial fiscal transfers

The Spanish Finance Minister, Cristóbal Montoro, announced on Friday that the publication of the so-called fiscal balances will be delayed until June, after he had promised to issue them by last December and by the current month of March. Montoro changed the calculation method in January, as the figures were used to support Catalonia's independence from Spain. Now, the new delay is "to improve" the report. This document shows how much money Catalan citizens and companies pay to the public authorities and how much returns to them through services, infrastructure and funds. A wide majority of the Catalan society has been complaining for decades that their contribution to finance services, infrastructure and funds in other parts of Spain is too excessive and they have asked for reducing such inter-territorial money transfers. Studies show that Catalans have been paying each year an average of 8% of Catalonia's GDP between 1986 and 2010, which represents 200% of Catalonia's total GDP.

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21 March 2014 09:36 PM

by

ACN

Barcelona (ACN).- The Spanish Finance Minister, Cristóbal Montoro, announced on Friday that the publication of the so-called fiscal balances will be delayed until June, after he had promised to issue them by last December and by the current month of March. It is thus the second three-month delay regarding this controversial report, which shows how much money Catalan citizens and companies pay to the public authorities and how much returns to them through services, infrastructure and funds. A wide majority of the Catalan society has been complaining for decades that their contribution to finance services, infrastructure and funds in other parts of Spain is too excessive and they have asked for reducing such inter-territorial money transfers, as Catalan public services are under-budgeted compared to other parts of Spain and the construction of basic infrastructure is delayed. Catalonia has been transferring around 8% of its GDP each year to the rest of Spain, which means giving away some €17 billion per year. However, many regional governments in Spain do not recognise such figures and the Spanish Government has only published them once, in 2008, despite many petitions from Parliament. Catalan parties have proposed to reduce such transfers and even to set a new economic agreement between Catalonia and Spain. However, the Spanish establishment has refused to significantly change the system. Catalan parties and the entire business community have been requesting for such figures to be issued, but the Spanish Government keeps delaying their publication while it is changing the calculation formula. Under the current political tensions regarding Catalonia’s independence, the Spanish Government is not providing this transparent tool and is creating great confusion around this issue.


In January, Montoro admitted that the fiscal balances were "wrongly used" by those supporting Catalonia's independence from Spain as one of their arguments. For this reason, back then he justified not issuing them in December as promised and announced they would be published in March with a new formula, showing "the costs of services per territories". The main Catalan business owners complained about this attitude and urged the Spanish Government to publish this data as soon as possible and using the traditional methodology.

The Spanish Government changes the methodology, delays the publication and creates confusion

Meanwhile, other Autonomous Communities have issued their own balances, such as Extremadura's regional government. According to them, Catalonia is a subsidised region in the current fiscal system, despite all the economic studies stating the exact opposite. Instead of criticising the Extremadura report, the Spanish Government spurred this confusion. Now, March has arrived and Montoro is delaying again the publication of the figures until after the European elections of late May. The official reason: the will "to improve" the report that is being prepared by a group of experts chosen by the Spanish Finance Ministry and led by Ángel de la Fuente. Furthermore, Montoro stated that the priority is now the Fiscal Reform, which has been on the agenda for the last two years.

Each year, Catalans transfer 8% of Catalonia's GDP, some €17 billion

A study issued by the Catalan Government showed that Catalans have been paying each year an average of 8% of Catalonia's GDP between 1986 and 2010, which represents 200% of Catalonia's total GDP. The only study by the Spanish Government, published in 2008 with only data from 2005, showed that Catalonia was transferring between 6.4% and 8.7% of its GDP (depending on the calculation formula) to the rest of Spain. This means a transfer of between €13 billion and €17.5 billion in a single year, when the budget of the Catalan Government was set around €30 billion. In fact, a Catalan study showed that around 43% of Catalan taxpayers’ money is spent outside Catalonia. Around 75% of the Catalan society want to change this situation and reduce these fiscal transfers, which damage Catalonia's public systems – which are under-budgeted – and economic competitiveness – since basic infrastructure is not being built or upgraded.

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  • The Spanish Finance Minister, Cristóbal Montoro, last week in Madrid (by R. Pi de Cabanyes)

  • The Spanish Finance Minister, Cristóbal Montoro, last week in Madrid (by R. Pi de Cabanyes)