The Catalan Government plans to save €700 million by reducing civil servants’ salaries and not replacing vacancies

Barcelona (ACN).- The Catalan Executive has provided details of how it will adjust €4 billion of its 2013 budget in order to reduce its deficit and meet the deficit target imposed by the Spanish Government. Besides the 1 billion tax increase already announced and agreed on with the Left-Wing Catalan Independence Party (ERC), the Catalan Executive – which is run by the Centre-Right Catalan Nationalist Coalition (CiU) – will have to implement further budget cuts. On Thursday it will present its austerity plan for the current year to the unions, which will affect all public employees, and aims to save €700 million. The plan is mostly based on repeating the measures already implemented in 2012, which mainly involved salary reductions and not keeping vacancies empty. As last year, public employees working in the Catalan Government or in any of the public entities that depend on it will not receive around 7% of their annual salary, corresponding to the summer and Christmas bonuses. Furthermore, according to the unions, 3,000 civil servant posts will remain empty and 10,000 substitution contracts will not be signed. The Catalan Government and the unions will hold the first official meeting to discuss the measures on Thursday.

Efforts aiming to meet the deficit target imposed by the Spanish Government

The Catalan Government has announced it will present the same adjustment measures to the unions as in 2012 in order to reduce public spending with the aim of meeting the 0.7% deficit targets unilaterally imposed by the Spanish Government. In fact, the Catalan Government has protested on numerous occasions about this “unfair” deficit target, as this does not correspond to its spending share and the responsibilities it takes managing basic public services, such as healthcare, education and social policies. The Spanish public sector has been allowed a total deficit target of 4.5% by the European Union for 2013. However, the internal distribution among the different government levels has been unilaterally decided by the Spanish Government, which has kept 85% of the deficit allowed for itself, while it only represents 50% of public spending. The Autonomous Communities represent 36% of Spain’s public spending, and the Catalan Government has proportionally a greater share since it manages more powers than most of the Autonomous Communities (such as police, prisons and short-distance trains). The Catalan Executive is still hoping that the Spanish Government will redistribute deficit targets within Spain if Brussels allows the country more room overall, increasing the current 4.5% target. If this happened, Catalonia hopes its deficit target would also be increased accordingly to its spending share, as the European Parliament has recommended. In this case, the Catalan Government should meet a 1.7% deficit target. The difference from 0.7% to 1.7% represents an adjustment of €2 billion in the Catalan budget.

If the deficit target remains at 0.7%, the human resource adjustment would go beyond €700 million

However, at the moment, the deficit target imposed is 0.7%, which represents a budget adjustment of almost €4 billion. The Catalan Government has planned to increase taxes by €1 billion, but there will still be €3 billion to be reduced through budget cuts. As in 2012, the adjustment affecting the Catalan Government’s human resources will be an essential part of the plan. If the Spanish Government relaxes the deficit objective for 2013, the €700 million plan affecting civil servants would be enough. However, if the Spanish Government insists on the 0.7% deficit target, further budget cuts will be needed in this area.

3,000 fewer civil servant positions, according to the unions

According to calculations made by trade unions, the plan to save €700 million in 2013 through the Catalan Government’s human resources means that 3,000 civil servant positions will be lost. The civil servants who retire or who go on leave will not be replaced. Furthermore, this means that 10,000 interim contracts – which were to substitute some of these posts or sick leaves – will not be signed. However, unions also stated that there might be greater flexibility for new recruitment in 2013.

The news was first announced on Wednesday at noon by the Catalan Public Television Broadcaster and it has been confirmed by the Catalan News Agency (ACN). Unions have complained about finding out about this plan through the media. The Catalan Government’s intention was to present the unions with the plan tomorrow.