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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.

The Spokesperson for the Catalan Government has said that the new Spanish Economy Minister’s proposal goes against the Constitution and Catalonia’s self-governance. The Basque Country is also against the measure announced by Luís de Guindos in an interview with the Financial Times. He said that the crisis “was an opportunity to impose hard conditions and measures” on the Autonomies; he also added that before the Autonomies pass their budget, the Spanish Government will have to approve it. The next day, the Spanish Vice President refused to go into detail on the issue but stated that every administration has to commit to the deficit objective.

The winner of the Spanish Elections, Mariano Rajoy, outlined his government programme at the parliamentary debate on his approval before being officially appointed Prime Minister. Rajoy, without revealing any details, talked about redefining public powers, reforming public administrations, homogenising welfare policies and ensuring market unity. The Centre-Right Catalan Nationalist Coalition (CiU), the Catalan Socialist Party (PSC), the Catalan Green Socialist and Communist Coalition (ICV-EUiA) and the Left-Wing Catalan Independence Party (ERC) warned Rajoy of not affecting Catalonia’s self-government with his reforms.

With this operation, the Catalan Banc Sabadell becomes Spain’s fifth largest banking group. The Bank of Spain has decided to accept Banc Sabadell’s offer to purchase the CAM, a savings bank that was rescued and restructured. Banc Sabadell buys CAM after the savings bank completed a €5.25 billion regularisation process to balance its books. Banc Sabadell will take on 20% of the expected losses over the next ten years from CAM’s real estate properties.

Both governments are currently defining their strategies and building their respective cases in preparation for a discussion on the issue in the coming months. The Spokesperson for the Catalan Government, Francesc Homs, has sent a clear message to the next Spanish Prime Minister: Catalonia will only accept a negotiation on a new fiscal model, which would reduce the financial transfers to Spain’s poorer regions. If the Spanish Government refuses to discuss about it, Catalonia will organise a citizen vote on it. Over the past few days, the People’s Party has hinted that the Catalan Government’s main claim is not a matter for discussion.

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.

Catalonia and the Basque Country might be the only Autonomous Communities in Spain without a victory for the People’s Party (PP). The Socialists are likely to win once again in Catalonia, but they risk loosing 40% of their seats. If they slump even further then they risk being overtaken by the Centre-Right Catalan Nationalist Coalition (CiU) or even the PP. A quiet electoral campaign has come to an end, with three main unknown answers: if the Socialist party will get its worst results over the past few decades, if they will also lose in their stronghold of Catalonia, and how the international financial markets will react in the coming days.

The Spanish stock exchange celebrated the European Summit’s results by increasing 4.96% in a one day of trading. The main managers of the Spanish banks are convinced they will get the requested core capital with their own resources. In addition, they believe they will need 13.5 billion euros, and not 26.1 once the detailed calculations are made. Spanish financial circles consider the new rules, adopted to counteract French and German banks’ exposition to Greek sovereign debt, do not particularly benefit Spanish banks, which almost do not hold any Greek debt. In addition, as was the case with the stress tests, the criteria to analyse the bank situation ignores Spain’s proposals and imposes those benefiting German banks.

Catalonia would have lost 60,000 residents by the end of 2011, according to the INE. For the first time in decades, Catalonia's population will fall this year. In the next ten years, Spain’s population would decrease by 1.2% if current demographic trends are maintained. At the end of 2010, Catalonia had 7,512,000 residents and Spain 47,021,000.

After not having found the needed private investors to meet the required levels of core capital, the Bank of Spain’s Governor announced that the Spanish State would intervene in four savings banks, including two from Catalonia. The State will control 100% of Unnim and 90% of CatalunyaCaixa. Once the banks are streamlined, private investors will be offered shares. The European Commission has authorised the operation. Now, all Spain’s banks and savings banks have at least 8% core capital. Considering the global banking sector restructuring in Spain, the Spanish State has spent 19,000 million euros from the public finances.

“It means that we are not wanted, we are excluded, we are ignored” stated Artur Mas, President of the Catalan Government and leader of the Centre-Right Catalan Nationalist Coalition (CiU). It was the first time he has spoken on the Constitutional amendment limiting the public deficit that has been agreed on only between the PSOE and the PP. The CiU has protested against reforming the Constitution solely on the basis of the agreement of only two parties. Members of the PP and the PSOE have been trying to convince the CiU to support what both parties had previously agreed, and PM Zapatero (from the PSOE) asked the CiU to show some “moderation”.

The data corresponded to the end of June. The Spanish Statistics Institute confirmed the data, proving the prediction by the Bank of Spain of a slowdown in the economy.

The yield on Spanish bonds reached 400 points more than German ‘bunds’, a record since the introduction of the euro

Unnim and CatalunyaCaixa would have 4.5% and 4.8% of core capital respectively. However, the provisions that all Spanish banks must have to face difficult times have not been taken into account as they did not exist in other European banking systems. With these funds taken into account, Unnim and CatalunyaCaixa would have approved the tests with 6.2% and 6.3% respectively. CaixaBank, the most important Catalan bank passes the test with 6.4%.

However, if the question is open to other options, 33% would prefer a Catalan State within a Federal Spain, 31.8% the current situation as an Autonomous Community and 25.5% want Catalonia to be an independent nation. The poll results also show that 75.5% of Catalans want the Catalan Government to raise all the taxes, while only 18.2% prefer the current system through which the Spanish Government raises the main taxes. The poll was compiled by the Catalan Polling Centre (CEO), which is managed by the Catalan Government.