Spain secures budget deal as Catalan party ERC confirms ‘yes’ vote

The Spanish government has secured enough votes to pass the first budget plan since 2018 after reaching a deal with the Catalan pro-independence party ERC on Wednesday.

The spending plan would allocate 2.3 billion euros to Catalonia, putting an end to Spain’s oversight of its finances, and granting the regional government direct control of Catalonia’s share in the European Union reconstruction funds.  

The deal with the Spanish executive was confirmed on Wednesday by the vice president of the Catalan government and one of ERC’s top leaders, Pere Aragonès.

With ERC’s 16 votes, plus 11 from Basque parties, the left-wing ruling coalition formed by the Socialists (120 seats) and Unidas Podemos (35) edges past the 175-vote majority needed to get its financial plan approved in the Spanish Congress.

While Catalan parties helped the Socialist Pedro Sánchez come to power in 2018, after ousting the conservatives in a no confidence vote, their ‘no’ to Sánchez’s budget plan over the situation of jailed pro-independence leaders led to two snap elections and months of political instability.

Four-point agreement

ERC's spokesperson in congress Gabriel Rufián explained on Tuesday that the pre-agreement is based on four points.

The first is the extension of the moratorium on social security contributions for the self-employed until March 2021.

The second is the creation of a "bilateral" committee for "fair tax reform" with a specific working group for the reform of tax on large fortunes "to end tax dumping in Madrid."

The third is the settlement of the Spanish Education Department's debt to Catalonia over scholarships since 2005.

The final point, which Rufián says is the most important, is the lifting of Spain's financial control over the Catalan government, imposed in 2015 by a previous Spanish administration led by Mariano Rajoy.

According to Rufián, his party's aim has been to secure "the maximum number of tools for the Catalan government."

The ERC spokesman said that the preliminary agreement is still pending internal ratification by the party.

Spain's minority coalition government has to seek votes from opposition parties such as ERC in order to pass the budget in congress.

Ciudadanos against

Meanwhile, unionist Ciudadanos will vote against it as announced by its leader Inés Arrimadas, who criticized the government for picking "the radical path" after ERC's and Basque force Bildu's supports.

According to her, the Socialist-led cabinet has rejected the "moderate path," and added that Pedro Sánchez "will never again be able to say that he had no alternative" than to seek the pro-independence backing.