spending

Madrid demands a certificate with every expenditure promising that no “unlawful activity” is being financed

The Catalan Government’s budget for 2016 has been drafted and €700 million more is to be allocated to social spending compared to the budget of 2015, according to the Catalan Vice President and Minister for Economy Oriol Junqueras. He also stated that the Health sector will see an increase of €317 million, while the Education budget will increase by €211 million and that of Social Services will grow by €173 million. An additional 50 million more euros are to be allocated to the sectors of Universities and Research, stated the Catalan Vice President. The budget will be increased for the first time in many years, with the goal of being “realistic” and avoid “generating expectations that cannot be satisfied”. The budget will be delivered this Tuesday to Parliament’s President Carme Forcadell and opened for discussion amongst the groups in the Catalan Chamber.

Following an appeal from the Spanish Government, the Constitutional Court has confirmed the cautionary halt adopted in January 2013 and it has now definitively banned the Catalan Executive's drug prescription fee. The measure had been adopted to reduce pharmaceutical spending by limiting superfluous drug demand in order to reduce the overall public spending. It was one of the austerity measures adopted by the Catalan Government in 2012 to reduce public deficit, in order to meet the strict deficit targets imposed by the Spanish Executive. The measure meant that Catalans had to pay a one-euro fee for each drug prescription, with a maximum of 60 euros per year and with many exceptions for people with chronic diseases, on low incomes and pensioners. On the same day, the Constitutional Court has backed the Catalan Executive's judicial fees, also appealed by Madrid.

A report issued by the Spanish Ministry of Industry, Energy and Tourism reveal how Catalonia has received €7.68 billion from foreign tourist expenditure between January and July of this year. The figure represents an increase of 9.8% on 2012, and also means that Catalonia received 23.9% of Spain’s total foreign tourist spending, higher than any other area. Meanwhile, each tourist spent an average of €878 during their visit – 4.4% higher than last year’s figures. The average daily expenditure also increased by 1.2% on last year to €123. The Canary Islands received the second highest amount of foreign tourist expenditure with €6.24 billion, while The Balearic Islands were third with €5.67 billion.

Catalonia won’t be able to meet its deficit targets without imposing cuts with “serious consequences” on the welfare state, said the Catalan President on Monday. Artur Mas explained in Parliament that the Spanish Government is forcing him to implement austerity cuts that are “impossible to meet without seriously affecting some basic elements of the welfare state”. Mas added that his government has been making a “very important” effort to reduce spending but blamed Madrid for “suffocating” the autonomous communities and local administrations by imposing very difficult deficit targets on them.

Compared to a year ago, the Catalan Healthcare System spent 24.6% less last July than in the same month of 2011. In July 2011, Catalonia spent €143.52 million on pharmaceutical products while it spent €108.10 million last month, when the drug prescription fee began and citizens started to pay a greater share of the cost of prescription drugs. Furthermore, drug prescriptions fell by 20%. In the whole of Spain, pharmaceutical spending also decreased by 24% last July, compared to a year ago.

The Spanish Social Security has published the list with the 417 drugs that from September will no longer be subsidised in order to reduce public spending and meet deficit targets. Most of them are some of the most consumed medicines for minor symptoms, such as heartburn, muscle pain, or diarrhoea. Since the measure is not popular among doctors, the Catalan Health Minister, Boi Ruiz, said that more expensive drugs with similar effects but not included in the list may now be prescribed, which would increase pubic healthcare spending instead of reducing it.

The Catalan Government has rejected the Spanish Executive’s initiative to limit public healthcare to foreign nationals without a legalised residence status. The Spanish Government proposed that irregular immigrants would only have access to emergency rooms and obstetrics services, but not to regular treatments and consultations. The Catalan Health Minister, Boi Ruiz, confirmed on Friday that in Catalonia, all foreign residents, independent of their legal status, would have free access to the public health system for “solidarity” principles but also “for public health reasons”. Besides the ethical issue, experts had warned about infectious diseases that could have increased because of having groups of people excluded from the health system.

CiU stated that it will be “absurd” that they support the current budget proposal in the Spanish Parliament although they are open to negotiate and modify it. Furthermore, CiU “does not rule out the possibility of taking the Spanish Government to court” for ignoring the current legislation. The Socialists directly considered the budget proposal “to mistreat Catalonia”. The Green Socialists ask for a “common Catalan front” against the budget. The Catalan Independence parties (ERC and SI) say the budget plunders Catalonia. The anti-Catalan nationalists stated the budget wants to please Merkel. The only party supporting the budget was the PP, which runs the Spanish Government.

The Spanish Government will not respect the territorial funding scheme, approved by the Spanish Parliament and in a referendum, as it will only invest 11% of its regional spending in Catalonia. According to the current legislation, in order to compensate for an historical lack of infrastructural investment in Catalonia recognised by the Spanish Parliament and the Constitutional Court, the Spanish Government must invest at least the equivalent of Catalonia’s economic weight within Spain, which represents 18.7% in 2012. Furthermore it does not include €1 billion pending from 2008 and 2009, to which Catalonia is legally entitled.

The Centre-Right Catalan Nationalist Coalition (CiU), which controls the Catalan Government, and the People’s Party (PP), the third political party in Catalonia’s Parliament, have agreed to reduce some of the fees from the original proposal, reduce the number of public companies, build new schools and community health centres, and allocate more money to municipalities and victims of terrorism. Furthermore, the agreement goes beyond the budget and foresees the development of laws and plans to foster employment, entrepreneurship and a spending limitation. CiU has denied that it has a “stable agreement” with the PP for the entire term. The PP has demonstrated its new central role in Catalan politics. Every opposition party has criticised the agreement.

For the first time since 1979, the Spanish Royal family has published how it spends the public money that it receives every year. In 2011, the household was given €8.4 million. The transparency of the monarchy comes at a time when the king’s son-in-law, Iñaki Urdangarín, and his business partners are the subject of a fraud investigation involving millions of euro of taxpayers’ money

Despite a 4.6% reduction in revenue, the Finance Department has been able to cut spending by €283 million when compared to 2010. The government had a deficit of €3.798 billion in the eleventh month of the year, equivalent to 1.9% of GDP. The aim of the Catalan Government is to close 2011 with a 2.66% budget deficit.

The Catalan Government will reduce department expenditure by 3.8%, public sector prices will increase and real estate assets will be sold. In addition, a symbolic tourist tax and a universal fee for each drug prescription will be introduced. The Catalan Finance Minister, Andreu Mas-Colell, insisted that next year’s budget continues with the two-year adjustment plan, which has been designed to reach a 1.3% deficit objective in 2012. Basic welfare services and security and judicial policies are the areas least affected by the reductions. In the next few weeks, parliamentary negotiations will take place to approve the final budget.

Lex Writer Richard Stovin-Bradford argues in an interview with the CNA that Catalonia “is adopting strong measures” to cut its deficit while some autonomous communities “have not yet reduced the spending” as much.