public deficit

The Catalan Finance Minister points towards extending the 2012 budget for the whole of 2013

August 1, 2013 09:23 PM | ACN

“2013 is done. We now need to think about 2014”, summed up the Catalan Finance Minister, Andreu Mas-Colell, after finding out about the 1.58% deficit target imposed yesterday by the Spanish Executive. Mas-Colell considers this target to be “intolerable” since it “asphyxiates” Catalonia. The Catalan Executive was waiting to find out this figure to approve its definitive budget for the current year, but considering the low deficit target it is now considering extending the 2012 budget for the whole of 2013 – as it has been doing so up until now. The Catalan Government will make the final decision on the issue next Tuesday. Furthermore, Mas-Colell warned that a €1.7 billion budget adjustment will be needed in 2014 that will be required to increase one-off revenue since the Catalan Government “cannot spend less than in 2013”.

The Spanish Government imposes a 1.58% deficit target for Catalonia and €2.6 billion of further budget cuts

July 31, 2013 11:38 PM | ACN

The Catalan Finance Minister, Andreu Mas-Colell, accuses the Spanish Government of “asphyxiating” the Autonomous Communities. The 1.58% deficit target imposed to the Catalan Government represents €2.6 billion of further budget adjustment compared to last year’s budget, which ended with a 1.96% deficit. Mas-Colell denounced that the Spanish Executive is “keeping for itself the greatest share of the deficit pie”, while it is only responsible for 50% of Spain’s public spending. The Spanish Government is setting itself a deficit target of 5.2% for 2013 and most of the flexibility allowed by the European Union, which authorised a 6.5% deficit for Spain’s total public sector. Meanwhile, the Autonomous Communities have a deficit target 4 times stricter, although they manage 36% of Spain’s total public spending as well as basic services such as healthcare and education.

Catalonia is the 3rd Autonomous Community paying the most and the 10th in amount of funds received from the Spanish Government

July 11, 2013 01:28 AM | CNA

The Catalan Executive has published the liquidation of Spain’s fiscal redistribution scheme of 2011. That year, Catalonia was the 3rd Autonomous Community paying the most taxes per citizen in Spain, with a 119.1% rate if the average were 100%. However, after the Spanish Government’s redistribution of money through services and investments, Catalonia was the 10th territory in spending per capita, with a 99.4% rate, below the average. In 2011, Catalonia received €16.91 billion, 3% less than in 2010. The region of Madrid was the Autonomous Community paying the most, since Spanish Government bodies and many multinational companies are based there. It was followed by the Balearic Islands, which received 12.3 million tourists while its population is just 1.1 million.

"Who the heck is funding whom? It's Catalonia that funds Spain" Mas answered Montoro

July 10, 2013 11:16 PM | CNA

On Tuesday, the Spanish Finance Minister, Cristóbal Montoro, stated before the Senate that the Spanish Government “was financing the services” the Catalan Executive provides. In an angry and agitated tone, Montoro concluded the intervention shouting “Do you understand?! Don’t you understand?!” to the Catalan Senator who had asked him about the recentralisation of power. The President of the Catalan Government, Artur Mas, answered the Spanish Finance Minister in a calm but angry tone: “the Catalan Executive finances public services thanks to the effort Catalan citizens make each day by producing, working and paying taxes. And from all the taxes paid by Catalan citizens, a large amount, as much as €16 billion leaves Catalonia and never comes back [after the Spanish Government’s redistribution]. Who the heck is funding whom? It’s Catalonia that funds the Spanish State from many points of view”.

The Catalan Government sells 13 buildings to AXA Real Estate for €172 million to reduce public deficit

June 26, 2013 01:15 AM | CNA

The Catalan Government will continue to occupy the facilities as a tenant, annually paying €16.2 million in rent over the next 20 years. The decision to sell Catalan Government properties had been taken to ease the difficult financial situation and obtain liquidity. The initiative is part of the austerity measures adopted to reduce the public deficit and increase revenue. Taking this last sale into account, the Catalan Government will have sold 17 properties for a total of €266 million since 2012. The Catalan Minister for the Presidency, Francesc Homs, emphasised that the revenue generated by these sales will allow the Government to undertake fewer budget cuts.

Catalonia rejects giving away power recognised by its main law and regrets the Spanish Government's recentralisation

June 22, 2013 12:00 AM | CNA

On Friday, the Spanish Government approved a €37.7 billion reform of Spain’s public sector which fosters the elimination of Autonomous Community bodies considered to be “redundant”. Instead of directly obliging the Autonomous Communities to eliminate them – which might be very tricky legally speaking, the Spanish Executive will link their suppression to the deficit targets allowed to the regional governments and the funds provided. However, in the case of Catalonia, most of the bodies included in the reform are recognised by Catalonia’s main law, approved in 2006 by the Spanish Parliament and through a binding referendum. The Catalan Government and most of the political parties are accusing the Spanish Executive of trying to recentralise Spain. In addition, the Catalan President said that unfortunately Madrid “teaches lessons” but “does not do its homework” and eliminates Ministries without competences.

The Catalan Government raises the tax on second-hand real estate sales to earn an additional €150 million

June 19, 2013 01:44 AM | CNA

The Wealth Transfer Tax, which is levied on sales of second-hand housing units and any other used real estate, will be raised from 8% to 10% as from the 1st of August. The Catalan Government expects to earn an additional €50 million in 2013 and €150 million in 2014. The Catalan Finance Minister, Andreu Mas-Colell, argued that the rise in the tax rate is equivalent to the VAT charged on sales of new housing units and that both taxes should be “parallel”. He also added that other Autonomous Communities had previously raised this tax to similar levels.

The President of the Catalan Government aims to stay in office regardless of the self-determination vote

June 12, 2013 01:16 AM | CNA

Artur Mas, President of the Catalan Government, presented the Government Plan for 2013-2016 on Tuesday, emphasising that he aims to complete the four-year office term regardless of whether Catalonia’s self-determination vote is finally held in 2014, as the governing Centre-Right Catalan Nationalist Coalition (CiU) planned with the Left-Wing Catalan Independence Party (ERC). With the Plan, Mas has set 77 objectives in seven different areas, aiming to reaffirm political leadership and show the Catalan Government’s actions in a wide range of areas such as economic recovery, job creation, public services, environment protection, etc. Mas also asked the ERC and the Catalan Socialists (PSC) to sit in the Catalan Government. All the opposition parties except the ERC criticised the Plan.

Catalonia contributed with 8.5% of its GDP to infrastructures and services in the rest of Spain in 2010

May 22, 2013 01:42 AM | CNA

On Tuesday, the Catalan Government posted the so-called fiscal balances for 2010, showing the difference between the money paid by Catalans in taxes and fees to the Spanish Government and what comes back in form of funds, services and infrastructure. Using the monetary flow formula, Catalonia had a fiscal deficit of €16.54 billion, representing 8.5% of its GDP. Using the benefit formula, the fiscal deficit represents 5.8% of the Catalan GDP (€11.26 billion). The Catalan Finance Minister, Andreu Mas-Colell, stated that both formulas “are complementary” but he found the monetary flow one to be closer to the reality. The figures are similar to the results from previous years as well as to the study published in 2008 by the Spanish Finance Ministry with data from 2005. In the last 25 years, Catalonia has given away 8.1% of its GDP each year.

The Catalan Government ended the first quarter of 2013 with a deficit of 0.21%

May 17, 2013 12:09 AM | CNA

Between January and March, the Catalan Government had a budget deficit of €411 million, representing 0.21% of Catalonia’s GDP. The definitive deficit target for 2013 for each Autonomous Community has not been set by the Spanish Government yet. Madrid set a 1.2% target a few weeks ago but everybody assumes it will be raised as negotiations are on-going with the Catalan Government. Rumours indicate that Catalonia’s deficit target may finally be set at around 1.8%. The Autonomous Communities posted a total public deficit of €1.24 billion at the end of the first quarter, corresponding to 0.12% of Spain’s GDP. According to the Spanish Deputy Minister for Budget, the figure represents half the deficit posted in the same period last year.

The Catalan Government adapts the budget extension guidelines to a provisional 1.2% deficit

May 15, 2013 01:18 AM | CNA

As it was announced on Monday, the Catalan Government has adapted its budget extension guidelines to a higher deficit target, while it is waiting to find out the definitive deficit target decided by the Spanish Government. Since the elections were held in November, it was the new Catalan Government’s responsibility to draft the budget for 2013. However, the budget has not been presented since the Catalan Government disagrees with the deficit target imposed by the Spanish Government and it is negotiating for its reduction. Meanwhile, it is operating with an extension of the 2012 guidelines, a procedure run by a series of strict guidelines. The guidelines included the 0.7% deficit target initially allowed for this year, which have obliged the Catalan Government services to implement severe spending limitations in the first months of the year. Most of the opposition criticised not debating the new guidelines.

The Catalan and Spanish Governments confirm that no specific deficit target has been agreed on yet

May 13, 2013 11:43 PM | CNA

During the weekend, the Spanish Finance Minister, Cristóbal Montoro, stated that the Catalan Government’s deficit for 2013 will not be above 2%. The Catalan Government has been asking for a 2.1% deficit target, corresponding to a third of the 6.3% that was announced by the Spanish Government as the figure allowed for Spain’s entire public sector. On Friday, several high-level meetings to discuss the issue were held in Barcelona between members of both executives. On Monday, the Spanish Prime Minister, Mariano Rajoy, stated that in his meeting with the President of the Catalan Government, Artur Mas, they did not discuss specific figures. He also stated that no figure will be decided on until the European Union officially confirms Spain’s 6.3% total deficit target.

The Spanish and Catalan Governments hold several high-level bilateral meetings in Barcelona on the same day

May 11, 2013 12:08 AM | CNA

On the occasion of the kick-off of the 2013 Barcelona International Motor Show, the Spanish Prime Minister, Mariano Rajoy, and 3 ministers (Finance, Economy and Industry) visited Barcelona on Friday. They held several meetings with the President of the Catalan Government, Artur Mas, and the Catalan Finance Minister, Andreu Mas-Colell. Mas and Rajoy talked for 20 minutes about Catalonia’s deficit target for 2013 and the budget for this year. Officially, they have not discussed the self-determination process. In addition, Mas also met with Luís De Guindos, Spain’s Minister for the Economy. Mas-Colell met with De Guindos and Cristóbal Montoro, the Spanish Finance Minister.

The Spanish Government raises the deficit target for the Autonomous Communities from 0.7% to 1.2% for 2013

April 27, 2013 01:06 AM | CNA / Gaspar Pericay Coll

The deficit target for Spain’s entire public sector has also been raised from 4.5% to 6.3%. The Spanish Government has kept 81% of the deficit for itself while it is only responsible for 50% of Spain’s public spending. The Spanish Government has allowed itself a 5.1% deficit target, while the Autonomous Communities are only allowed a target of 1.2%. The regional governments fund the basic welfare state services and manage more than 35% of Spain’s total public spending. The Catalan Government welcomes the revision but considers it not to be enough. The Catalan Finance Minister, Andreu Mas-Colell, has been insisting that the Autonomous Communities should have at least a third of the total deficit. Therefore, with an overall target of 6.3%, the Catalan Executive should have a target at least 2.1%.

The Spanish Government will relax the Autonomous Communities’ deficit targets and is open to setting them on individual basis

March 21, 2013 11:41 PM | CNA / Gaspar Pericay Coll

The Spanish Finance Minister, Crístobal Montoro, confirmed that if Brussels relaxes Spain’s total deficit target for 2013, he will share this flexibility with the Autonomous Communities’ governments. A working group has been created to analyse the most convenient formula for this, including that of setting different deficit targets for each Autonomous Community. The Catalan Government celebrated the decision, since it has been asking for it for many months. In addition, the Catalan Finance Minister, Andreu Mas-Colell, stated that he will look for “a smooth relationship” with the Spanish Executive to negotiate the details. On Wednesday, Mas-Colell proposed the idea that deficit targets could be set according to debt levels. In the last few days, the Catalan Government has sent several messages in order to show a willingness to talk to Rajoy’s cabinet about the most important subjects on the table.