budget

Catalan President, Carles Puigdemont, insisted this Thursday on the importance of passing the budget for 2017. If the bill, which will be put to vote in February, doesn’t receive the required support in the Catalan Chamber, “the Government can’t continue, for reasons of dignity and democratic coherence”, Puigdemont stated. Thus, he called for pro-independence radical left CUP, the main partner of cross-party list ‘Junts Pel Sí’ in the Government to have “courage” and allow the bill to be passed. CUP already vetoed the previous budget last summer, forcing the extension of the 2015 budget, after considering it “too autonomic” and not proper of a state which aims to be independent.

The support of 2 MPs from radical left pro-independence CUP, the main partner of governing cross party 'Junts Pel Sï', allowed the budget for 2017 to overcome the appeals presented by the oppoistion groups in the Parliament. Catalan Vice President and Minister for Economy and Tax Office, Oriol Junqueras, defended this Tuesday the budget for 2017. According to Junqueras, the draft especially focuses on “fiscal justice” and social expenditure, which he defined as fundamental pillars for economic growth. “We have many difficulties and many more are being put in our way, but it is clear that our economy and our society are capable of making it through”, he stated on the first day of the two-day session during which the Parliament will vote on the budget for 2017. “This is the best budget possible”, he assured in November, right after presenting the bill to the Parliament’s Bureau and emphasised the social orientation of the draft budget. Indeed, more than 74% of the total bill for 2017 is allocated for social expenditure and €1.1 billion more has been allocated for this purpose in comparison to the budget for 2015, which had to be extended for 2016.

The legal services of the State Attorney are already “studying” the impugnation of the Catalan Government’s draft budget for 2017, which includes an allocation of €5.8 million to guarantee that the independence referendum scheduled for September will be carried out. The announcement was made on Wednesday by the delegate of the Spanish Government in Catalonia, Enric Millo, who stated that this part of the accounts “could be challenged” in the near future by the Spanish state. Furthermore, Millo believes that the allocation could be annulled by the Spanish Constitutional Court, which may consider it to derive from the Declaration of the 9-N symbolic vote, which has already been declared unconstitutional. The delegate of the Spanish Government in Catalonia believes that this budget “doesn’t contribute” to the relationship between the Catalan Government and the Spanish one. However, he reiterated his “outstretched hand for dialogue” and confirmed he will be meeting with the Catalan President, Carles Puigdemont, this Friday. 

The Government’s draft for the 2017 budget was published in the Parliament’s Official Journal this Tuesday. On Wednesday, the different groups in the Catalan Chamber will be able to present appeals and the whole bill will be discussed on the 20th of December. “This is the best budget possible”, Catalan Vice President and Minister for Economy and Tax Office, Oriol Junqueras, stated right after presenting the draft. “The time of cutbacks is over”, he assured and emphasised that the budget for 2017 has been enhanced in comparison to the previous one “both as a whole and in each department”. Indeed, the budget for 2017 allocates €1.1 billion more to social expenditure than the bill for 2015 – which was extended for 2016. The Health System with €8.7 billion and Education and Universities with €5.5 billion are the areas with the highest amounts allocated.

The Government’s draft budget for 2017 presented to the Parliament's President, Carme Forcadell, this Tuesday includes an allocation of €5.8 million to guarantee that the pro-independence referendum scheduled for September will be carried out. In particular, the bill establishes €5 million for electoral processes and €0.8 million for participation. Moreover, the budget also includes hidden allocations which would allow the referendum to take place despite the inevitable suspension of the Spanish Constitutional Court (TC). In 2014, the budget also allocated €6 million oriented toward holding the 9-N symbolic vote in independence. At that time, the allocation was included within the Public Administrations department. However, this time the allocation would be an explicit competence of the Catalan Ministry for Economy and Tax Office. 

The Catalan Ministry for Economy and Tax Office presented this Wednesday the data of the macroeconomic chart to be included in the budget for 2017, which the Catalan executive expects to pass next week.  According to this document, the Catalan economy’s expected growth will be 3.4%, 0.5% more than the growth forecast for the Spanish economy, which is expected to be 2.9%. Regarding 2017, the chart keeps the figure released last May which foresaw 2.7% growth. According to the Catalan Vice-president and Minister for Economy and Tax Office, Oriol Junqueras, this figure is “considerably higher” than the expected growth for the Eurozone (1.5%). The budget for 2017 also foresees the creation of 160,000 jobs between 2016 and 2017. 

Barcelona’s Mayor, Ada Colau, will have to submit to a vote of confidence after the opposition blocked the budget presented by the local government for 2017. All the opposition parties except from the Catalan socialists (PSC), with whom the executive has an agreement, voted against the new accounts in a committee on Tuesday. Colau said this Wednesday that she is “not afraid” of a vote of confidence, but stated that “there is still room to reach an agreement” and to avoid it. In this vein, the mayor stressed her will to “seriously take into account all the arguments and proposals made” by the opposition to improve the budget that will be voted on on the 23^rd of December. If Colau loses this vote, the opposition will have a month to submit a vote of no confidence - which will need to be supported by at least 21 councillors (absolute majority) to force her out. 

There will be an allocation in the 2017 budget for the pro-independence referendum, which the Catalan Government will carry out “regardless of the situation”. Thus, the Secretary for Tax Office, Lluís Salvadó, responded to pro-independence CUP’s demands to call a referendum in 2017 even if the Spanish Constitutional Court (TC) could ultimately appeal or suspend the bill. “The Catalan Government has a univocal commitment and the referendum will go ahead”, he stated this Tuesday in an interview with TV3. “We will do it in one context or another”, he added. The bill for 2017, which received CUP’s support last Saturday, also increases social expenditure by 989 MEUR in comparison to the amount allocated for this purpose in 2015. The Government is determined to approve the budget for 2017 and bring the bill before Parliament on the 29th of November.

The Catalan executive and radical left pro-independence CUP are negotiating the fiscal law, the so called Accompaniment Law, for the 2017 budget. The draft is set to include tax reforms as well as the introduction of new taxes especially oriented toward avoiding property speculation. One of the main hurdles has to do with the reform of income tax, which foresees the elimination of tax relief for property purchase for those who earn more than 30,000 euros per year. By applying this modification the Government could collect 11 MEUR in 2018, negotiators estimate. CUP also aimed to increase income tax for those who earn more than 60,000, but this proposal is not apparently on the table.

Catalan President, Carles Puigdemont, insisted on the Government’s will “to collaborate with a Spanish State which would allow Catalans to vote”, but warned that the offer to hold a binding referendum on Catalonia’s independence “doesn’t expire, but [it] won’t paralyse us either”.“It’s either a referendum or a referendum”, he stated before the Parliament during the first phase of the vote of confidence and forecast that the vote will take place “in the second half of September”. The Catalan President called on MPs to start “a chain of confidence which will not end tomorrow [when the vote of confidence will take place] but continue until Catalonia becomes an independent country”. In this sense, he warned those who won’t support the budget for 2017 not to support him on Thursday and “avoid further wasting of time”. Although Puigdemont assured that he was “not afraid” of the vote of confidence result, he also insisted that he will call new elections if he doesn’t obtain enough votes.

Radical left pro-independence CUP have insisted on the “need” to meet with Catalan President, Carles Puigdemont, before he submits to a vote of confidence, on the 28^th of September. The Government’s partners aim to discuss the pro-independence roadmap first, which was ratified two weeks ago by the Catalan Parliament and suspended a few days afterwards by the Spanish Constitutional Court (TC). Regarding the debate on the budget for 2017, which became an essential point after CUP refused to pass the bill for 2016, the radical lefties insist that approval is not guaranteed and that the draft for 2017 will have to be designed according to the roadmap. “It would be nonsense if the bill for 2017 didn’t foresee an allocation for the unilateral referendum on independence”, CUP pointed out.

The pro-independence parties in the Catalan Chamber, governing cross-party list ‘Junts Pel Sí’ and radical left CUP, have expressed their differences regarding the vote of confidence on Catalan President, Carles Puigdemont, which will be held in September. While ‘Junts Pel Sí’ consider voting in favour of Puigdemont’s presidency to imply backing the budget for 2017, CUP see things differently and stated that renewing the confidence in Puigdemont is part of the agreed pro-independence roadmap but not necessarily linked to the bill. The Catalan Government’s spokeswoman, Neus Munté, considers the budget an “indispensable tool” for the pro-independence roadmap to move forward.

The Catalan President, Carles Puigdemont, rebuffed on Thursday a request by the radical left-wing party CUP to “rebuild bridges” of trust after their veto of the 2016 draft budget bill. “The best bridges are those that you do not burn”, he said in a plenary session in the Catalan Parliament. The Catalan Government, led by the pro-independence coalition ‘Junts pel Sí’, expected the parliamentary support of the anti-capitalists following an agreement between the two parties in January that saw former Catalan President Artur Mas stepping aside and Puigdemont taking office. But CUP presented an amendment to the budget bill, the most important law of the parliamentary term, thus making it impossible for the Government to pass it. Following this, Puigdemont announced he will submit himself to a vote of confidence in September. CUP MP Mireia Boya said that the pro-independence forces should “rebuild bridges” from “today”, adding that the anti-capitalists feel “responsible but not guilty” for the current situation. Meanwhile, sources close to the Government suggested to the CNA that Puigdemont will use the summer to widen support for his government and depend less on CUP.

Catalan President, Carles Puigdemont considers pro-independence radical left CUP’s veto on the bill for 2016 to “mark a turning point” and assumes that the stability agreement reached between pro-independence forces CUP and cross-party list ‘Junts Pel Sí’ is now broken. However, Puigdemont nuanced that this doesn’t mean that the current term of office is over but assured that from now on ‘Junts Pel Sí’ will rule in minority, with the 62 MPs they have in the 135-seat Catalan Parliament. During a meeting with the Catalan executive held this morning, right before the debate over the budget, Puigdemont stated that the bill for 2016 won’t be passed “at any price” and that the Government’s project is not “for sale” as the main goal continues to be achieving independence

The stability of the parliamentary term in office and the relationship between the Catalan Government and the radical left-wing party CUP are at risk after the latter decided on Tuesday to maintain its total opposition to the 2016 draft budget bill. The Catalan Vice President and Catalan Minister for Tax Office, Oriol Junqueras, said that the decision will have “extremely severe consequences” and that “social services” will be particularly affected. The Catalan Government spokeswoman, Neus Munté, warned that the stability of the current term was “hit” and regretted that CUP didn’t respect the agreement with the pro-independence cross-party list ‘Junts Pel Sí’, the main party in the Parliament, through which they committed to “guarantee parliamentarian stability”. Munté also warned that CUP’s veto “will have consequences” but emphasised the government’s aim to “continue working to put Catalonia at the gates of independence”. CUP’s rejection of the bill, which they considered insufficient and still too “autonomic”, forces the Catalan Government to extend the 2015 budget.