The Catalan Government says “enough is enough” to further public expenditure cuts, but Madrid keeps putting on the pressure

Madrid / Barcelona (ACN).- The political battle to pay for the public deficit and public expenditure cuts has taken a new turn with battle lines being drawn this week. The Spokesperson for the Catalan Government, Francesc Homs, dug his heels this morning in a radio interview. He said that “enough was enough” to the Spanish Government demands to go further in the already agreed 10% reduction in public expenditure. The Catalan Government unveiled this week that the Spanish Government is asking them to cut up to 22% of its expenditure, up to 5.8 billion euros. They see this claim as “not serious” and “intolerable”, especially since the Spanish Government owes money to Catalonia. Madrid has also taken measures to increase Catalan Government expenditure without any consultation. Catalonia contributes 18 billion euros annually to the rest of Spain. This represents a fiscal deficit of 9% of its GDP, comparing the money it gets from the Spanish Government to the money it gives to it. Homs followed the warnings made by the Catalan President on Monday in Madrid and yesterday’s statements by the Catalan Minister for Finance, Professor Andreu Mas-Colell. Yesterday, Mas-Colell also said that it seemed that the Spanish Government wanted the Catalans to “make up” its numbers, something that “the Catalan Government will never do”, stated Mas-Colell. Homs stressed this in his accusations and pointed out that once again the figures of the Catalan Government “will not be made up”. The Spanish Ministry for Finance reminded Catalonia that if it does not reduce its deficit and meet the 1.3% objective for 2011, it will run out of cash as it will not be allowed to issue long-term debt. This sounded like a threat of economic asphyxia. In addition, the Ministry formally confirmed in the evening it will not pay this year the money claimed by the Catalan Government, but it does not close the door to further negotiations. Almost all the political parties in Catalonia including the Catalan branch of the People’s Party (PP) and the Anti-Catalan Nationalist Ciudadanos (C’s) supported the Catalan Government in its stance of not going further with public expenditure cuts if the Spanish Government does not fulfil its obligations. All Catalan political parties agree except for the Catalan Socialist Party (PSC), the main opposition party that is also part of the Spanish Government. The Catalan Green Socialist Party (ICV) also criticised the Catalan Government for reducing the deficit with expenditure cuts and for wanting to eliminate the inheritance tax.

The PSC, which is linked to the Spanish Socialist Party (PSOE) of Prime Minister José Luís Rodríguez Zapatero, accused the Catalan Government of “lying”. The PSC answered Homs’ statements and defended the Spanish Government, in which the PSC participates. The party’s spokesperson Miquel Iceta and the party’s leader in the Catalan Parliament Joaquim Nadal later stated that “the only obligation is to fulfil the deficit objective of 1.3%” for 2011, which is shared with the other Autonomous Communities. They denied that the Spanish Government is asking for an extra budget reduction that would reach 22%. “Nobody is asking for cuts of more than 10% or 20%. They are making this up. It is not true”, said Nadal. He continued by saying that nobody “is obliging anybody to make up [budget] data, neither to dig their heels in”. Nadal said that the Catalan Government is now accusing the Spanish Government to put this pressure on them “to justify badly planned [expenditure] cuts, that have been badly prioritised and badly explained”. Following this line, the Catalan Green Socialist Party (ICV) also criticised the Catalan Government. ICV accused the Catalan Government, ruled by the Centre-Right Catalan Nationalist Coalition Convergència i Unió (CiU), of cutting social expenditure while at the same wanting to eliminate the inheritance tax, a measure that would benefit the wealthiest part of society.

The Catalan Government says “enough is enough”

The Spokesperson for the Catalan Government, Francesc Homs, warned this morning that Catalonia could dig its heels in and say “enough is enough” to the expenditure cuts. Homs explained that in his opinion Catalonia is strong enough and “it has democratic institutions supported by its citizens”. The Catalan Government feels that Catalonia is already making a very serious effort to reduce the public deficit; an effort which is not sufficiently shared by the Spanish Government and the rest of Spain. Catalonia not only is reducing its public expenditure by 2.6 billion euros, which represents 10%. Catalonia is also paying 9% of its GDP each year to the rest of Spain through the solidarity system, which represents a total amount of 18 billion euros each year. The Catalan Government is accusing the Spanish Executive of pushing for an additional expenditure cut of 3.2 billion euros. In total, the Catalan Government is stating that the Spanish Government is demanding a reduction in public expenditure of 22%, or in real money terms by 5.8 billion euros. Homs stated that it is “intolerable” and insisted that the Catalan Government will not go that far, as it will drastically damage basic services such as healthcare and education. These basic services, which are regularly the most expensive ones in governmental budgets, are fully provided by Autonomous Communities in Spain.

In fact, Homs stated these warnings the same day that Catalan hospitals are presenting their plans to cut their expenditure by 10%. This means that surgery rooms will be closed in the afternoons, entire hospital floors will be shut down and the number of hospital beds reduced. Another announced measure is closing the medical consultation services during the month of August. In addition, temporary staff will be laid off or not renewed. The Spokesperson for the Catalan Government wanted to emphasise the real effort they are making to reduce the public deficit, and demanded that the Spanish Government meet the agreements already set out and fulfil with its obligations towards Catalan citizens.

The People’s Party backs the Catalan Government

The Catalan President of the People’s Party (PP) Alícia Sánchez-Camacho stated that her party backs the Catalan Government in its attitude of saying “enough is enough”. Sánchez-Camacho accused Prime Minister’s Zapatero Government of owing money to Catalonia and not fulfilling its obligations. She said that Zapatero does not want to give the money because “he spent it in futile programmes that did not contribute to reduce unemployment”. The Catalan Independence Party (ERC) also back the Catalan Government and demanded that the Spanish Government pay the money it owes. Even the Populist and Anti-Catalan Nationalist Party Ciudadanos (C’s), who most of the time are against the Catalan Government, partially supported the Catalan Executive “if its claims were true”. The Spokesperson for Ciudadanos, Jordi Cañas, asked the Spanish Government to pay the money it legally owes to Catalonia. Cañas also asked the Catalan Government to go to the Catalan Parliament and clearly explain the financial situation and the negotiations taking place with the Spanish Government in order to give them their full support on this issue.