The Catalan and Spanish Governments dig their heels in regarding Catalonia’s “fiscal agreement”

Both governments are currently defining their strategies and building their respective cases in preparation for a discussion on the issue in the coming months. The Spokesperson for the Catalan Government, Francesc Homs, has sent a clear message to the next Spanish Prime Minister: Catalonia will only accept a negotiation on a new fiscal model, which would reduce the financial transfers to Spain’s poorer regions. If the Spanish Government refuses to discuss about it, Catalonia will organise a citizen vote on it. Over the past few days, the People’s Party has hinted that the Catalan Government’s main claim is not a matter for discussion.

CNA / Gaspar Pericay Coll

November 28, 2011 11:51 PM

Barcelona (ACN). - The Spokesperson for the Catalan Government, Francesc Homs, said on Monday that if the new Spanish Government does not want to discuss a new fiscal model guaranteeing a drop in the amount of money that Catalonia provides for poorer regions of Spain, the Catalan Executive will organise a vote to gather support. Since the People’s Party (PP) victory in the Spanish General Elections, party leaders have sent warning signs regarding the issue. The messages ranged from those considering it not even worthy for discussion to those stating that now is not the right time to ask for a change in the system due to the economic problems that the country is experiencing. However, for the Catalan Government, run by the Centre-Right Catalan Nationalist Coalition ‘Convergència i Unió’ (CiU), this issue is its main cause, its main political proposal and electoral argument. The “fiscal agreement”, as it calls it, is receiving an increasing amount of support among Catalan citizens. Some opinion polls have reported that the “fiscal agreement” has around 75% support. Due to the high number of citizens in favour it comes as no surprise that Homs has suggested the idea of a non-binding referendum. The Catalan Government does not have the power to call for a binding referendum. Both the Catalan and the Spanish Governments have begun to dig their heels regarding their positions on the rearrangement of Spain’s fiscal model.

In a recent opinion poll, more than 75% of citizens would support “the fiscal agreement”. The reason for that high percentage is that in the current economic and financial crisis the money Catalonia gives to Spain’s poorer regions is a heavier burden. And at the same time, it is in greater need by the Spanish State after the huge drop in public revenue throughout Spain. The Catalan Government had a public deficit of 4.2% in 2010 and will close 2011 with a public deficit of 2.66% of its annual GDP. In addition, the budget for 2012 foresees a public deficit of 1.3%. This drastic reduction is being achieved through cuts in the Catalan Government’s public expenditure. This is affecting all services, including healthcare and education, in an attempt to reduce the public deficit. An increasing number of Catalan citizens believe that having such a large public deficit is not compatible with transferring so much money to the rest of Spain through inter-regional solidarity. This amounts to 8.5% of its annual GDP (from official figures), which represents €18 billion. In addition, many Catalan citizens have condemned the use of the money for unproductive investment or for services that Catalonia cannot afford itself but that poorer regions do. Therefore, the so-called “fiscal agreement” proposed by CiU is based on limiting inter-regional solidarity: continuing with regional equalisation but not to the current levels that have caused a cut back in Catalonia’s public services. It has also forced a delay in investments desperately needed by certain economic sectors. The “fiscal agreement” is based on a model already existing for the Basque Country and Navarra, a fact that supports the Catalan Government’s claim.

A citizen vote to ask for the “fiscal agreement”

In an interview by Catalan Public Television this Monday, the Spokesperson for the Catalan Government, Francesc Homs, who is also the Catalan President’s “right hand man”, sent a warning to the new Spanish Government. If they do not want to negotiate the proposal for a new “fiscal agreement” for Catalonia, the Catalan Government will call for a citizen vote. Homs stressed that the People’s Party hold control due to their absolute majority at the new Spanish Parliament and therefore do not need any other support to run the Spanish Government and legislate in the coming four years. However, with a citizen vote, which would very likely support CiU’s “fiscal agreement”, Homs asked: “Can they govern the Spanish State against the wishes of the people of Catalonia?” According to him, “Catalonia needs to show that this majority [supporting the fiscal agreement] exists”.

Homs announced that the Catalan Government will proceed to approve the ‘Law on People’s Votes’ this December, foreseen in Catalonia’s main law (the Statute of Autonomy) and under discussion in the last few years. This law would enable the Catalan Government to call for a non-binding referendum, although it would not be allowed use this term, since the Spanish Government is the only power authorised to call for a referendum. The Catalan Government will call for a non-binding “people’s vote”.