Spanish PM says he will study the proposal of a new economic agreement between Catalonia and Spain

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.

CNA / Gaspar Pericay Coll

August 27, 2012 11:35 PM

Barcelona (ACN).- The Spanish Prime Minister, Mariano Rajoy, agreed to study the proposal approved by the Catalan Parliament to put into action a new fiscal agreement between Catalonia and Spain, which aims to reduce its solidarity contribution to the rest of Spain and have all taxes raised by a Catalan-run agency. Rajoy answered on August 10th a letter from the Catalan President, Artur Mas, which was sent on August 2nd. The existence of the answer has been known this Monday August 27th. Mas sent Rajoy the proposal for this new fiscal agreement and asked to meet with him to discuss it. Rajoy agreed on meeting with Mas. The Spanish PM stated he was hoping to discuss about other issues as well. He also asked Mas to support him at European and international level.

The new fiscal agreement proposal has a wide support among Catalan citizens (more than 76% according to the latest polls) and centres the political debate in Catalonia. Rajoy had previously refused to discuss the proposal, as he said Spain was facing other priorities. However, in Catalonia, the majority of the political class and also the main business associations keep insisting that is precisely in the current financial crisis where the poor funding of public services in Catalonia and the lack of investment from the Spanish Government is more obvious than ever and therefore it is urgent to discuss a new fiscal scheme providing Catalonia with a greater share the revenues it generates. According to official studies, Catalonia contributes 8.5% of its GDP to fund services and investments in the rest of Spain, an annual amount representing €17 billion. At the same time, the Catalan Government had a €7 billion deficit in 2011 and had to dramatically cut public spending in all government areas (including healthcare and education) in order to reduce the deficit.

In the last weeks, political debate in Catalonia has focused on the Spanish Government’s supposed rejection of this fiscal proposal. The Centre-Right Catalan Nationalist Coalition (CiU), which runs the Catalan Government, has managed to centre the political debate around this issue. CiU has made this issue its main political focus and it will be the main priority for the coming months. Furthermore, Catalan nationalists consider this proposal to be the last opportunity for an understanding between Catalonia and Spain. If the proposal was rejected, many voices state Catalan nationalism will have to prioritise independence.

By answering Mas’ letter and especially making it public, Rajoy seems to have changed his total opposition to talking about the issue, aware that this frontal opposition feeds Catalan claims and gives more arguments to those who maintain that no understanding is possible between Catalonia and Spain. However, in his letter Rajoy does not make any assessment of the proposal.

In addition, Mas asked Rajoy for a meeting to discuss the proposal. Rajoy stated in his letter that both his and Mas’ cabinets will find the most convenient date for the meeting. The meeting will probably take place in the second half of September. Furthermore, the Spanish PM insisted he hopes to be able to discuss other issues.