autonomous communities

Elena Salgado, the Spanish Vice President for Finance, wanted to end the debate and discarded transferring the 1.45 billion euros from the fund in 2011. This is the amount asked for by the Catalan Government. The Catalan Minister for Finance has been asking for “co-responsibility”. The same day, the Spanish Senate approved a motion asking the Spanish Government to pay this fund this year as it is its legal obligation. The Catalan Government prefers political dialogue than taking the issue to the courts, as suggested by the Catalan Socialist Party.

The Spanish Government demands an additional budget reduction of 3.2 billion euros to Catalonia, while the Catalan Government claims 3.3 billion owed by the Spanish State. Catalan parties have accused Prime Minister Zapatero of reducing his government’s deficit by increasing that of the autonomous communities. The Spanish Government wants to force Autonomous Communities to pay for the deficit by limiting it through specific laws.

The Bank of Spain today released the debt of the Spanish Autonomous Communities. Catalan public debt represents 16.2% of Catalonia’s GDP and increased 36.7% in one year. The new Catalan Government stressed its austerity and stability plan, which will cut public expenditure by 10%.

Artur Mas, the President of the Catalan Government, met with the “State Minister” of the Moroccan Government, Mohamed El-Yazghi, who acts as a deputy prime minister. Mas recommended that Morocco build a pseudo-federal model, as was done in Spain, giving the Western Sahara some degree of autonomy.

According to the new German Chamber of Commerce Managing Director in Spain, the Central European country could promise young Catalans not only training and competitive salaries but also job stability. He also explains which are the obstacles in his view that stop German investments in Spain and Catalonia.

After yesterday’s meeting with Spanish Prime Minister Zapatero and the Catalan President, nine Autonomous Communities are protesting and accusing Zapatero of giving privileges to Catalonia. The Catalan Government rejects these accusations recalling that all the discussed transfers were pending issues that had already been agreed on. The new debt will be used to re-finance previous debt and reduce the deficit. This evening, the Spanish Ministry of Economy clarified that Catalonia’s authorisation will be applicable to all the Communities with an approved viability plan.

In the last few days, a series of declarations by Spanish leaders put some dark clouds over the future of the Autonomous Communities model, a cornerstone of the current Spanish Constitution. The People’s Party (PP) shot first, claiming for more centralism, and the Spanish Socialist Party did not want to be left behind. Today, Prime Minister Zapatero showed up by surprise at the Senate to defend the current model.

For the whole of Spain, Autonomous Communities’ public debt represents 10.2% of Spain’s GDP in the 3rd term of 2010. It is the highest it has been since 1990. However, the largest part of the public debt comes from the Spanish Government, which represents 44.1% of Spain’s GDP. Finally, public debt from local public administrations only represented 3.4% of Spain’s GDP. In total, Spain’s public debt represents 57.7% of the country’s GDP, much lower than in the UK, Germany or Ireland.

The Spanish Ministry of Economy believes that the budget cuts for autonomous communities have nothing to do with the 7.9% cut in the Spanish general budget.