Agreement on Catalan Government’s 2015 budget after increasing social spending by €100 million

Barcelona (ACN).- The governing centre-right pro-Catalan State coalition CiU and the opposition left-wing Catalan independence party ERC reached an agreement on Monday on the Catalan Government’s budget for the current year, which should be definitively approved in the first week of February. After the President of the Catalan Government and CiU leader, Artur Mas, and the ERC’s President, Oriol Junqueras, reached a pact on holding early elections on 27 September as a plebiscite on Catalonia’s independence from Spain, both parties reopened the talks on the 2015 budget. After 10 days of negotiations, they have reached a definitive agreement, which includes a €100 million fund that will be almost entirely used to bring greater resources for social programmes. The CiU and the ERC have also agreed on cancelling the payment of some allowances and expenses currently being paid to senior officials. Furthermore, €10 million is to be added to the €44 million already earmarked for the development of Catalonia’s own tax administration. Finally, they will also create the Agency of Social Protection, which is to manage Catalonia’s Social Security system (which should pay for pensions and unemployment benefits). These two bodies are considered basic and strategic structures for being able to build a Catalan State. Furthermore, the CiU has included the creation of such state structures in its latest electoral programme as a way to develop Catalonia’s self-rule, regardless of whether or not it becomes independent from Spain.

Catalan Government to refund 24% of the salary cuts from 2012

Besides this, on Monday, the Catalan Executive also confirmed an agreement with the main trade unions to refund part of the salary cuts from 2012, imposed by the Spanish Government. Back then, the Spanish Prime Minister, Mariano Rajoy, decided to eliminate one of the 14 payments in which annual salaries are split in Spain (one payment for each month and two additional ones in early summer and early winter). This decision represented reducing public employee annual salaries by 7.1%. Instead of entirely eliminating one of the additional payments, both summer and winter payments were halved. The Catalan Government kept this salary cut in 2013 and 2014, while public employees throughout Spain were receiving their full salary for those years. The Catalan austerity measure was aiming to reduce public deficit.

For 2015, the Catalan Government announced it would reinstate the full salary for all public sector employees and it would also work to refund part of the wages lost during the last three years. After negotiations with trade unions, this March the Catalan Government will pay 24% of the eliminated amount in 2012 to all its 220,000 public employees. The unions stressed it was insufficient and further payments would be needed, but nonetheless they welcomed the measure and the atmosphere to reach agreements with the Catalan Executive. The initiative to pay back 24% of the 2012 salary cuts represents €130 million in expenditure.

€100 additional million for social programmes

Representatives from the CiU and the ERC signed a document compiling the modifications of the Catalan Government’s budget bill for 2015 and presented it to the press. The main news is the creation of a €100 million fund which will be almost entirely used to bring additional resources to social policies. Specifically, €88.5 million will be used to bring additional resources to programmes for dependent or handicapped people (either physically or mentally); for fighting poverty; for non-obligatory school transportation; for musical education; for social housing; and for upgrading some education centres. In addition, the Catalan Government will contribute another €10 million to the fund created to fight energy poverty (for families that cannot pay their heating, electricity and water bills).

The additional money will come from part of the additional funds generated by the Spanish Government’s decision to cancel interest rates on the loans given through the Liquidity Fund for the Autonomous Communities (FLA). The Chairman of the CiU parliamentary group, Jordi Turull, explained that the annual savings from such a decision would represent some €600 million. With this money, the Catalan Government will also fund part of the restitution of the full salary of public employees for 2015.

Greater efforts for building state structures

The agreement also foresees the further development of the main state structures of a future Catalan State. Catalonia’s own tax administration will receive €54 million in total, €20 million more than in 2014. The aim is to attain a fully functional embryo that can quickly grow if needed, having its main structure and regulations ready. In a similar vein, Catalonia’s own Social Security system will be created through the newly-born Agency for Social Protection. Such structures would not be 100% completed before the elections, since in order to define their final scope and dimension, Catalan citizens have to vote on independence or an agreement should be reached with the Spanish authorities on these matters. In any case, the objective is to go as far as possible in the current legal framework and be ready if necessary.

In addition, right now an absolute majority of the Catalan Parliament is backing the creation of such structures, after a wide majority of MPs run in the last elections promising their creation. In fact, regardless independence, between 75% and 80% of the Catalan population (according to the polls) is supporting the increase of Catalonia’s self-rule, including developing its capacity to collect all its taxes, for instance.

As well as the agreement on the tax administration and the Social Security system, Catalonia’s own market regulation authority will also start to be developed, after the CiU and ERC’s agreement. On top of this, a nuclear safety agency will be created, considering that Catalonia has 3 nuclear plants in its territory. In a similar vein, the CiU and ERC have agreed on particularly protecting Catalonia’s energy infrastructures. Finally, the Catalan Government will start to make a list of all the public assets in Catalonia, in order to be ready for hypothetical negotiations with the Spanish authorities to fairly split the assets and liabilities in case of independence.