budget cuts

Following the advice of the Catalan Council for Constitutional Guarantees (CGE), the Catalan Executive will appeal the Spanish Government’s decree to save €7 billion in healthcare this year. However, it will continue implementing the decree until a judicial decision is made. According to the CGE, the decree violates 3 Spanish Constitution articles and 3 others from the Catalan Statute of Autonomy. The decree does not guarantee equality among all citizens, since it limits access to public healthcare. In addition, it invades the Catalan Government’s powers. Left-wing Catalan parties were the first to ask for CGE’s opinion, since they consider the new decree violates basic social rights.

The Catalan Government’s finances corresponding to the first four months of 2012 showed a €535 million budget surplus. Spending has been reduced by €240 million in comparison to the same period last year, when the Catalan Government’s budget had a deficit of €1.13 billion. The budget surplus is mostly due to the transfers made by the Spanish Government, which partially correspond to payments from 2010.

The Catalan Government will adjust its budget by €4.295 billion in 2012, through spend cuts of €2.680 billion and increasing revenue by €1.615 billion. With this plan, the Catalan Government will meet the 1.5% deficit target. The Council of Fiscal and Financial Policy (CPFF), which brings together the Spanish Government and the 17 Autonomies, has approved Catalonia’s budget adjustment plan for 2012-2014. The Spanish Government would pay part of the money owed, but not all of it. The Catalan Government has included a plan B in case the Spanish Government does not honour its fiscal obligations towards Catalonia.

The third plan represents an additional budget cut of €1.5 billion, in order to meet the 1.5% deficit target for this year. The President of the Catalan Government, Artur Mas, said that the plan “guarantees essential services”. He also stated that if the Spanish Government had paid what it owed last year, the current reduction would be halved. The plan decreases budget allocations for public companies, reduces public employee salaries once again, decreases the amount allocated for subsidies, delays investments, privatises some public companies, sells public buildings, and implements the measures decided by the Spanish Government regarding health and education. The opposition criticised the plan for not being concrete and effective enough.

Barcelona City Council is concerned about being able to maintain the current public kindergarten model taking into account the budget cuts announced by the Catalan Government to reduce public spending. While in 2011 the Government contributed €1,600 per child, next year the quantity might be reduced to €1,000.

The Spanish Finance Minister, Cristóbal Montoro, blamed the Autonomies and town halls for Spain’s public deficit. Montoro stated that the Spanish Government is meeting the deficit objective for 2012 with the results from the first quarter. However, Catalan MPs reminded Montoro that he is refusing to pay the money it owes Catalan institutions and that with this strategy he transfers the blame for the deficit by not transferring the funds. The Catalan Government directly accused the Spanish Executive for their “massive lie”. According to internal studies from the Catalan Government, the Spanish Executive made incorrect calculations by saying the Autonomies could save €10 billion in healthcare and education with last week’s measures.

In an interview with the Catalan Public Television Broadcaster, the Catalan President and leader of the Centre-Right Catalan Nationalist Coalition (CiU) recognised that the Spanish Government could intervene the Catalan Government. “It could happen, I won't deny it”, he said. Furthermore, he warned that “the mistrust level will be very high” if the Spanish Government does not pay the money it owes the Catalan Executive. Mas said that “if Madrid wants to intervene Catalonia’s self-government”, he would call early elections. In addition, he said that further budget cuts will be needed.

The day after the Spanish Government imposed increasing the price citizens pay for medication, the Spokesperson for the Catalan Government confirmed that Catalonia will maintain the €1 drug prescription fee. The Catalan Health Minister had said earlier they would study if the drug prescription fee would be implemented. The main doctors union and Left-Wing opposition parties asked the Catalan Government to eliminate the drug prescription fee, because it would make Catalan citizens pay more for their medication than the rest of Spanish citizens.

The Spanish Minister of Health met with her counterparts from the Autonomous Communities to discuss measures to reduce healthcare spending by €7 billion. Pensioners will have to pay for 10% of their medication, with a maximum of between €8 and €18 per month depending on their income. Furthermore, people with a job will have to pay for 40% to 60% of the price, depending on their income. Besides, the number of pills will better adapt to prescriptions, drug purchases will be centralised and generic drug prescriptions will be fostered. Catalonia might not eliminate the drug prescription fee although the final decision will be taken once the impact of measures is fully studied. The Catalan Minister also emphasised that the main problem in Catalonia is “the system’s funding” and not expenditure, which cannot be further reduced.

The Spanish Minister for Education met with his counterparts from the Autonomous Communities and imposed 6 measures that must be adopted to save €3 billion. The Catalan Minister considers that three of the measures might invade powers managed by the Autonomies, and therefore the Spanish Government might be ruling beyond its jurisdiction. The Catalan Government will study them and does not rule out bringing the Spanish Government to the Constitutional Court. Nonetheless, the Spanish Minister reminded that, before a judge says the contrary, the measures are still obligatory. Besides, the Catalan Minister also emphasised the previous austerity efforts made by the Catalan Government also in Education, and the Spanish Ministry’s “lack of knowledge” about them.

Catalan university staff and students protested against the budget cuts, temporary worker lay offs and an increase in university fees. Peaceful demonstrations with thousands of participants were organised in Barcelona, Tarragona, Girona, and Lleida. However, the Barcelona demonstration did not stick to the schedule and split into different protests. A group of students became violent and broke the glass at a bank branch, threw eggs at the stock exchange, burned three containers and one vehicle, and occupied the rectorate at Barcelona University. 500 students concentrated in front of the Mobile World Congress, which is taking place in Barcelona, and police prevented them from breaking in.

No workers will be laid off and no strikes will be organised. The management and workers of Barcelona Opera House have reached an agreement on the theatre’s deficit reduction measures. The management has decided not to proceed with the temporary mass layoff of 90% of the staff for 2 months after accepting the workers proposal to give up their extra payment in the summer. The agreement guarantees the regular schedule of the opera season, with the exception of ‘A Florentine Tragedy’, due out in April, which might be cancelled.

Barcelona’s Opera House faces a deficit of 3.7 million euros, after a reduction of public funds and other revenues. In the last weeks tense negotiations between the theatre’s management and employees are taking place. Workers are facing the temporary suspension of their contracts from March 20th to April 19th. Workers will also be affected from June 5th to the July 8th.

As agreed, the PP abstained during the vote on the Catalan Government’s budget for 2012. The final text was approved with the 62 votes from CiU MPs, which controls the Catalan Government, the one vote from an independent MP, and the abstention of the PP. The rest of the parties have voted against it, in a tense plenary that has formalised the distance between the Government and the Left-Wing opposition parties. The details of some of the budget’s measures will have to be approved in one month, because three minority parties have asked for a “constitutionality” check.

The Spanish Finance Minister, Cristóbal Montoro, announced that the Central Government might heavily fine the governments of Autonomous Communities that do not meet the deficit objective. Montoro, from the People’s Party (PP), met with the regional governments run by his party to prepare a common position on the issue. On the same day, the Centre-Right Catalan Nationalist Coalition (CiU) gave its support to the Spanish’s Government decree to cut public spending and increase taxes, announced at the end of December.