A reduction of the solidarity contribution to Spain by a third would leave Catalonia with no deficit
According to the Barcelona Chamber of Commerce, if Catalonia continued contributing to Spain’s fiscal redistribution scheme but it did so to a lesser extent, Catalan public finances would have no deficit and Catalonia’s public debt would be much smaller. The Chamber reminded that Catalonia is giving 8.6% of its GDP each year to the rest of Spain in terms of solidarity, an amount that has no other equivalent in Europe. In addition, the Chamber emphasised that this contribution is “excessive” as basic services and infrastructures in Catalonia are not properly funded.
Barcelona (ACN).- The Barcelona Chamber of Commerce estimates that a reduction in the amount it is obliged to pay the rest of Spain for solidarity reasons by a third would leave the Catalan deficit at zero, and less than a third would still reduce part of the deficit. This was announced publicly to the press this Tuesday by the Chamber’s President, Miquel Valls. Valls also stated that “Catalonia’s fiscal contribution is excessive” as later it does not have enough resources “for taking care of the essential services” linked to the Welfare State. The Chamber of Commerce highlighted that the liquidity problems that the Catalan Government is facing at present are a direct consequence of the fiscal deficit, which is the difference between the amount of taxes raised in Catalonia and the amount it receives back in terms of investments, local funding and services provided by the Spanish Government.
Valls has justified his claims by showing the economic data which suggests the contribution to the rest of Spain is an annual average of 8.6% of Catalonia’s GDP. Valls reminded that the deficit of the Catalan Government in 2011 stood at 2.6% of Catalonia’s GDP, less than a third of the amount. The Chamber of Commerce highlights the fact that Catalonia’s liquidity problems are not linked to the solvency of the Catalan economy, but are directly related to its fiscal deficit with the rest of Spain.
Valls pointed to the great effort that Autonomous Communities have made to reduce costs by 8.1% between January and March. A better effort than that of the Spanish Government, which during the same period saw a 12% increase in expenses.
Yet though, the Chamber emphasised that the new adjustments imposed by the Spanish Government for reducing the deficit will be difficult to achieve in one year and “will have a negative effect on the Catalan economy”. “The solidarity of Catalonia with the rest of Spain leaves us in a very serious financial situation,” concluded Valls.
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