Spanish budget 2023 allocates 17.2% of investments to Catalonia, below GDP share

The Spanish government's 2023 budget bill will see 17.2% of funds allocated to Catalonia, below its GDP share of 19%. 

The spending plan devised by the Socialist and Podemos coalition government allocates €2.308 billion to Catalonia, slightly up from last year's €2.23 billion in last year's budget.

Yet, the long-standing fiscal deficit complaint of pro-independence parties is set to continue, despite the fact that more money will be granted to Catalonia than in 2022, which was also an increase compared to 2021's allocation. 

The Spanish government presented the spending plan on Thursday to MPs in the Congress of Deputies and is yet to be approved by lawmakers in Madrid. 

Combined, the Socialists and Podemos do not have enough seats in Congress to pass bills such as the 2023 budget and will need the support of other parties in order to see the spending plan approved. 

Catalan pro-independence parties ERC and PDeCAT were two of the groups in the chamber that supported the approval of the 2022 budget, along with Basque parties and other groups. 

However, sources close to the Spanish finance ministry say that negotiations with ERC will be "difficult," and that figures from the executive have already made contact with the different parliamentary groups over approving the budget.  

The same sources say that the 2023 budget complies with Catalonia's statutory provisions as with an additional €200 million in investment, owed from a court ruling over pending 2008 budget allocations, Catalonia's share rises to 18.5%, a figure closer to its GDP share. This would increase the amount allocated to Catalonia to €2.508 billion.

Catalonia is also set to receive another €200 m it was yet to obtain from the 2008 budget following a 2017 Supreme Court ruling.

The portion of 17.2% is the equal highest that any region in Spain receives in the spending plan, level with Andalusia, the southern region with around 1 million more inhabitants than Catalonia.

Andalusia, the most populous region in Spain, is in line to receive the highest investment at €2.318 bn, followed by Catalonia, the second-most populous. Madrid will receive the third-highest investment with €1.305, representing 9.7% of the total investment plan, up from 8.9% on last year's budget.  

€10 million will also be allocated to the production and promotion of cinema and audiovisual content in co-official languages in Spain; Catalan, Basque, and Galician.

Short- and medium-trains to remain free

One of the most eye-catching points from the 2023 budget that was announced earlier in the week is the intention to keep all short- and medium-distance train journeys from state-owned rail company Renfe free for all of 2023. 

The measure was introduced in the summer as a way of combatting inflation and encouraging public transport and is currently in force from September to the end of December of this year.

The Socialists and Unidas Podemos also announced this week that €266.189 bn would go towards social spending. This means 60% of the budget is allocated to social programs, "the highest amount ever," according to finance minister María Jesús Montero.

The agreement includes €100 grants for households with children 3 and under.

It will also increase pensions and targeted basic income in line with inflation, which the government expects to be around 8.5%. 

Spain below investment plans in Catalonia 

The amount of investment planned in any region in the budget project does not mean that said quantity will spent on projects in that region.

In 2021, only 35.8% of the amounts pledged for Catalonia were actually spent on projects. That is, €739.9 million, meaning that two-thirds of the projects planned were never executed. 

These figures were published by Spain's finance ministry in May 2022, along with the investment in other territories such as the Madrid region, which was allocated 184% of the amount foreseen in the spending plan (€2.08 billion).

Some hours after those Spanish finance figures were published, sources of the Spanish government said that since 2018, when the Socialists came to power, Catalonia "is the region that has received more public investment," with €3.67 billion, a figure much higher than the €2.39 billion allocated in the preceding four years. 

Also, the same sources say that in the first term of 2022, budget allocation for Catalonia is 60% higher than in the same period of 2021 – "three times higher than the average growth for all territories."

Between 2015 and 2018, a mere 65.9% of the budgeted public spending in Catalonia was delivered upon. Madrid, meanwhile, received 114% of what was planned. The Spanish average during this time was  75.3%.