austerity

The Catalan Government has drafted a plan regarding public employees for the 2012-2014 period. The aim is to reduce public spending in order to meet the deficit targets by reorganising civil servants, including their working conditions. The plan foresees the possibility of a reduction in salaries and working hours, as well as making their working conditions, tasks, and location more flexible. 6,800 temporary workers will have their hours reduced by 15% from April 1st. Unions have criticised the plan. However, the Catalan Vice President has asked unions to avoid exaggerating the issue and creating problems.

There has been a unanimous call in Catalonia for greater flexibility of the deficit objectives applied to the Autonomous Communities for the current year. Every political party in Catalonia, including the People’s Party (PP), has asked the Spanish Government to provide more flexibility to the Autonomies, which manage 40% of Spain’s public spending and run basic Welfare State services. The Spanish Government has set a new deficit target of 5.8% of Spain’s GDP for 2012; internally, the Central Government allowed itself a deficit of 4% and ordered the Autonomies to commit to a deficit of 1.5%. Some Catalan parties have said that the Spanish Government has double standards.

The Spanish Government stressed that no Autonomous Government will be left disappointed if they have a “responsible” attitude and have an austerity plan in place. However, those failing these measures could be intervened the same way “the European Union” has done with countries such as Greece and Ireland, but without “having their powers taken away”, clarified the Spanish Finance Minister, Cristóbal Montoro. The Autonomous Community governments have renewed their 1.3% deficit objective for 2012 and the Spanish Government has offered additional tools to raise funds and solve liquidity issues. The Catalan Finance Minister, Andreu Mas-Colell, has met bilaterally with Montoro to foster cooperation and discuss the Catalan Government’s claims about the €2.2 billion the Spanish Government owes Catalonia.

The Financial Times has published an interview with the President of the Catalan Government, Artur Mas. The Financial Times stressed Mas’ request for a new deal between Spain and Catalonia, which would reduce Catalonia’s contributions to the rest of Spain by half. The FT explained that between 8% and 9% of the annual Catalan GDP, which represents between €17 billion and €18 billion per year, goes to the rest of Spain to pay for solidarity funds for poorer regions. The newspaper also praised the “pioneering” austerity measures implemented by the Catalan Government.

Catalonia already approved its own spending limit through a law of its own last September. The Spanish Vice President, Soraya Sáenz de Santamaría, explained that the new Budget Stability and Sustainability Law will introduce “mechanism corrections” and “almost automatic” sanctions for public administrations that do not meet the deficit objectives. In addition, before approving their budget, the Autonomies and large city town councils will have to commit to a spending limit and present detailed reports on several aspects of the budget. However, she stressed that each autonomous government will have the freedom to allocate resources.

The Catalan President, Artur Mas, has met with the UK Deputy Prime Minister, Nick Clegg at a summit of European Liberal leaders. He stressed that Catalonia is doing “its homework” despite the excessive and “continuous fiscal drainage” from the Spanish State, which “is unprecedented in Europe”. “European leaders must understand” Catalonia’s situation, Mas said. “We need to explain ourselves” […] “because otherwise the only image that is received abroad is distorted”. He also explained that Catalonia’s GDP is the size of Portugal’s and Finland’s, and has an export level similar to Denmark. Mas also criticised Rajoy’s recent tax increase.

Artur Mas, President of the Catalan Government, has reflected on his first year in office. Mas justified the budget cuts his government has made in order to avoid “a collapse” in public services. He also criticised the recent trend of patronising the Autonomous Communities and claiming that they are responsible for Spain’s financial problems. That, he believes, has made them scapegoats. “The Autonomies are a very important part of the State”, “they provide almost all public services to citizens”, he stressed. In addition, Mas insisted that Spain’s debt and deficit is mainly due to the Spanish Government’s overspending over many years and not the fault of the Autonomies or the municipalities.

In a radio interview, Luis de Guindos, said he is supportive of the budget austerity measures put in place by the Catalan Government over the last 12 months. In addition, the new Spanish Minister for the Economy stated that the drug prescription fee proposed by the Catalan Government is Catalonia’s responsibility, contrary to that said by the previous Spanish Government. In addition, the Catalan Health Minister explained that the drug prescription fee would include exceptions “basically” based on personal “economic reasons”.

2011 has been a year marked by the austerity measures undertaken by the new Catalan Government, who took office just one year ago; budget cuts to reduce the public deficit and fight the financial crisis, which sparked protests. Socially, 2011 has been a tense year, with the highest unemployment figures in a decade, strikes, and the ‘indignados’. It has also been a year of political changes: the Catalan Nationalists (CiU) have consolidated their position as Catalonia’s hegemonic party and the PP won in the whole of Spain except in Catalonia and the Basque Country. International opportunities have arrived: the Mediterranean Railway Corridor has been declared a European Union priority, Barcelona has been confirmed the Mobile World Capital and ‘Pa Negre’ will represent Spain at the Oscars. And FC Barcelona is the best team in the world!

The Catalan Government will reduce department expenditure by 3.8%, public sector prices will increase and real estate assets will be sold. In addition, a symbolic tourist tax and a universal fee for each drug prescription will be introduced. The Catalan Finance Minister, Andreu Mas-Colell, insisted that next year’s budget continues with the two-year adjustment plan, which has been designed to reach a 1.3% deficit objective in 2012. Basic welfare services and security and judicial policies are the areas least affected by the reductions. In the next few weeks, parliamentary negotiations will take place to approve the final budget.

In order to foster transparency, almost all the Catalan Members of the European Parliament have asked the European Commission to supervise the Catalan Government's budget, and other “regions of systemic importance”. Catalonia’s GDP is as big as that of Finland and Portugal. MEPs from CiU, ERC, ICV, and the PP believe that this procedure will prove Catalonia’s reliability and rigour, and will subsequently have a positive effect on the international financial markets. The PSC is looking at possibly joining the initiative.

In a meeting at the Parliament of Catalonia, the Catalan Government has announced that it will reduce its budget contribution to the Catalan public television and radio broadcaster (CCRTV) by 13.3%. As a consequence, the entire CCRTV budget will drop and two of the six digital TV channels will be closed. However, the Government’s Spokesperson, Francesc Homs, in charge of public media, said no staff would be laid off.

On Tuesday, the Catalan President announced a series of measures that will be included in the 2012 budget in order to meet the 1.3% deficit objective. The Catalan Finance Minister said that the fall in public spending will be smaller than that of this year. Ministers from the Catalan Government have been providing more details about the measures. The so-called “moderating ticket” to reduce the Catalan public healthcare system’s pharmaceutical bill has been questioned by the Spanish Government, as Barcelona “does not have the powers to do so”, despite managing the public healthcare system in Catalonia.

Artur Mas, the President of the Catalan Government, has announced the main austerity measures to reduce Catalonia’s public deficit and meet the 1.3% objective for 2012. Mas stressed that these measures are to be taken in order to reduce the deficit and not harm social policies. The Catalan People’s Party was satisfied with the plans, while the Left-Wing parties warned that they would harm the middle classes. The Catalan President also sent a warning to the next Spanish Prime Minister: a new “fiscal agreement” for Catalonia might be “one of the few opportunities left” to rebuild relations with the rest of Spain.

The President of the Catalan Government detailed his plan to Herman Van Rompuy to balance the Catalan budget and reduce the public deficit. Artur Mas stressed the importance of the Mediterranean Railway Corridor for the European economy and he also outlined the benefits of an effective Union for the Mediterranean, in this moment in particular. Mas was joined by Josep Antoni Duran i Lleida, his electoral ally and leader of the Catalan Christian Democrats. They also met with Competition’s Commissioner, Joaquín Almunia.