Once again the Spanish Government will not honour investment obligations in Catalonia next year

Barcelona (ACN).- The Spanish Government’s budget for 2013 does not honour the legal obligations regarding investment to be made in Catalonia. Instead it continues with a long tradition of funding Catalonia way below its needs and investing much less in Catalonia than in other parts of Spain. Instead of getting 19% of the infrastructure investment made throughout Spain – which is foreseen in the current legislation – in the Spanish budget for 2013 Catalonia will only receive 11.9%. The Spanish Finance Minister, Cristóbal Montoro, justified the decision by saying “there is no money”, although the law talks about investment percentage and not absolute amounts. Furthermore, essential infrastructures for Catalonia’s economy, and therefore for Spain’s and Europe’s competitiveness, are under-budgeted while the Spanish Government finds the money to build non-priority infrastructures, such as high-speed railways in Galicia. On top of this, the Catalan Minister for Territory and Sustainability, Lluís Recoder, emphasised that the Spanish Government had only executed 35% of the public work initially foreseen in its budget for 2011, while it had executed 111% of the public work made in Madrid. Unfortunately, the pattern to fund Catalonia below its needs is generalised and not only affects infrastructural projects. For instance, the Catalan Culture Minister emphasised that the Spanish Government has reduced its funds to Catalan cultural centres and festivals by 70% over two years, leaving some of them without funds. Additionally, the Catalan Health Minister claimed that the Spanish budget for health research in Catalonia, a true biomedical research pole in Southern Europe, has been reduced by 50%. In fact, Catalonia suffers from a chronic fiscal deficit, which is very often ignored or even denied by the rest of Spain and the Spanish nationalists. They refuse to acknowledge Catalonia’s solidarity effort and even state it “invents” the figures, neglecting data published by the Spanish Finance Ministry.

A chronic fiscal deficit

With data from 2009, Catalan taxpayers only received 57 cents back from each euro paid in taxes in the form of investments or services. According to official data released by the Catalan Government, between 1986 and 2009, Catalonia has been giving an average of 8.5% of its GDP to pay for services and investments made in the rest of Spain (calculated using the monetary flow formula). The Spanish Government has only released this sort of data once, in 2008, with data from 2005. It showed that Catalonia had a fiscal deficit of between 6.38% and 8.70% of its GDP, depending on the formula used. The amount represented in 2005 a fiscal redistribution effort ranging from €10.86 billion to €14.81 billion respectively. Nowadays, it could represent an effort of almost €17 billion. This imposed solidarity effort is judged to be excessive by a large part of the Catalan society, which would like the fiscal deficit to be reduced and limited, especially when essential infrastructures are not built and public services are under-budgeted in Catalonia.

11.9% instead of 19%, required by law

This approach of funding Catalonia below its real needs, repeated over decades, asphyxiates the Catalan economy and its public services and has a direct impact on the citizens’ lives. The delays in building essential infrastructures for the Catalan economy hit not only Catalonia’s competitiveness, but also that of Spain and Europe. During the Zapatero Government’s period the Spanish Parliament recognised this historical lack of investment. In order to compensate for this historical lack, it legislated to guarantee that for seven years a minimum investment percentage corresponding to Catalonia’s GDP within Spain would be attained. This measure was included in the Catalan Statute of Autonomy (as the third temporary disposition), approved by the Spanish Parliament and the Catalan people through a referendum. This means that the Spanish Government should have allocated 19% of all its infrastructure investment to Catalonia, independent of the total amount. Instead, the Spanish Government decided to allocate just 11.9% of its global investment to Catalonia. The Spanish Finance Minister, Cristóbal Montoro, justified the decision by saying “there is no money”, although the legal obligation refers to percentages and not final amounts. In the 2012 budget, instead of investing 19% in Catalonia the figure was 11.1%. Back then, the Spanish Finance Minister did not feel obliged to meet “agreements reached by third parties”, he said, even if they took the form of a law in place.

High-speed train in Galicia, the top priority

Furthermore, the Spanish Government found money to build non-essential infrastructures such as the high-speed train to Galicia, linking Galician cities among themselves and Madrid. The fact that the elections will be held this October in Galicia and that the People’s Party (PP), which runs the Spanish Government, also runs the regional government was not mentioned by the Spanish Finance Minister as a reason for such an investment. In any case, the Galician high-speed train will receive more funds than the Mediterranean Railway Corridor, which links Southern Spain with Central Europe, going along the entire Mediterranean shore, where the main export centres, industrial poles, sea ports and tourist areas are located.

The Spanish Government insists on the Central Railway Corridor, to be built parallel to the Mediterranean

The Mediterranean Railway Corridor is considered to be an essential infrastructure for international freight transportation backed by the Governments of Murcia, Valencia and Catalonia and business associations at local but also at European level. In addition, the European Commission has also considered it a priority and has included it among the Trans-European Networks. However, now, the Spanish Government wants to include in this list the Central Railway Corridor, which would link Madrid and Toulouse going through the middle of the Pyrenees. The Central Corridor responds to the centralist and radial logics traditionally applied by the Spanish Government to the main infrastructures. The Central Corridor was ruled out by the European Commission last year as being inefficient and would not receive EU funds. However, the Spanish Government does not give up. Nonetheless, the Spanish Government is insisting on building the Central Corridor at the same time as the Mediterranean Railway Corridor, which would split the scarce resources available between the two works and therefore it would delay the construction of an infrastructure essential for Catalonia’s and Europe’s competitiveness.