The Catalan fiscal pact is also beneficial for Spain, argues President Mas

Barcelona (ACN).- The Catalan President, Artur Mas, is making the case for full fiscal autonomy for Catalonia in a series of trips abroad. The first was on Tuesday to Portugal, where he met President Aníbal Cavaco Silva and Prime Minister Pedro Manuel Passos Coelho. In Lisbon, Mas said it is imperative to explain why Catalonia needs a new fiscal arrangement with Spain. The Catalan government wants to be able to raise and manage all taxes, in a system of full fiscal autonomy similar to the one enjoyed by the Basque Country and Navarre. Currently, Catalonia gives 9% of its GDP to the rest of Spain every year. While the Government recognizes the need for solidarity with the poorest regions of Spain, it argues that this percentage is far too high and is dampening the possibilities of Catalonia to pay for its own services.

Using a metaphor considering the importance of Catalonia’s economy, President Artur Mas said that achieving the fiscal pact would avoid “slowing down the driving force of the Spanish economy”. “We want the situation of Catalonia to be understood abroad, so that people can see that not helping the driving force of the Spanish economy is in turn damaging the Spanish economy as such”, he argued.

Catalonia has a structural deficit of resources because it annually pays about €18 billion to the rest of Spain but it does not receive a fair amount of public investments in return. In fact, the Spanish government has not paid in to the Generalitat the legally-binding competitiveness funds in the last two years or its infrastructure debts in Catalonia. Despite being one of the richest parts of Spain, after all tax-money is distributed amongst the provinces and economical pressures are considered, Catalonia is ranked below some of the regions that it is actually subsidizing.

Austerity

Artur Mas has always argued that the current spending cuts implemented by his government would be less severe if Catalonia was able to manage all its money directly. The President considers that the country is completely able to finance itself with its own resources and would be better-off with a new fiscal arrangement from Spain.

Mas compared Catalonia and Portugal saying that both are “taking seriously” the current economical challenges and introducing austerity measures as urged by Brussels. After meeting the Portuguese Prime Minister, Mas said the government in Lisbon “creates confidence” by implementing all the decisions asked by Brussels in its rescue-package plan. “The aim of the Portuguese government is to finish its tasks as soon as possible in order to get out of a complicated situation. This is quite similar to what we are doing in Catalonia”, he said.

Mas argued that it is necessary to “take seriously the austerity measures and create confidence, because the consequences of inaction are even worst” than those created by the spending reviews. Unlike other autonomous communities in Spain, Mas’ government is already implementing its third round of spending cuts, with 10% reductions in sensitive areas such as Education and Health. The Catalan President explained his policies to his Portuguese counterparts, showing what he considers to be the “leadership” of Catalonia in implementing austerity measures and reforms. He admitted the decisions taken in the last two years have been “painful” and “hard”, especially considering that austerity adds up to an already complicated financial situation related to the fiscal deficit.

Growth

Artur Mas and his Portuguese counterparts agreed on the need to combine austerity with other initiatives aimed at creating growth. The Catalan President argued that the European Union is not doing enough to “stabilize” the euro, a situation that makes it even more challenging to restore growth. “Catalonia exported to the world more than to the rest of Spain last year, and it is experiencing a good tourism season”, said Mas from Lisbon. “What we need is internal consumption and investment, as Portugal. And we won’t get that without confidence and mechanisms for financing ourselves”, he added.