The Spanish Government’s investment in Catalonia to drop by 25% in 2014

Barcelona (ACN).- On Monday the Spanish Government presented its budget proposal for 2014. As every single year, it will only invest in Catalonia a much inferior budget share than Catalonia’s weight within Spain in GDP or population terms. In 2014, the Spanish Government is planning to spend just 9.6% of its total regional investment in Catalonia, far short of the Catalan GDP (18.9% of Spain’s total) and population (15.7%). In addition, compared to the budget forecast for 2013, the €944.42 million planned for 2014 represents a 25% annual drop, while investment throughout Spain will only be reduced by 7.2%.

The Spanish Government’s budget proposal for 2014 only allocates to Catalonia €944.42 million of direct spending. This represents a 25% drop from €1,262.30 million in 2013, which then represented 11.9% of the total regional spending. Then, the Spanish Government did not respect the legal obligation to spend in relative terms at least Catalonia’s share of Spain’s GDP, a legal compensation for an historical lack of investment to be implemented between 2007 and 2013. This means that in 2013 it should have spent 18.9% of its total spending in Catalonia, but instead it invested 11.9%. In fact, the Spanish Government has never honoured this legal obligation in these last seven years. On top of this, in 2014, the first without the legal obligation and in the middle of the Catalan independence debate, Catalonia’s share of the Spanish Government’s investment is even lower; and it is decreased way beyond the 7.2% average reduction.

The Spanish Finance Minister, Cristóbal Montoro, stated that this is “the recovery budget” and “establishing the bases of rigour, austerity and commitment to the reduction of public deficit”. Answering questions about the low investment share in Catalonia, Montoro downplayed it by saying “now it is not the time” to talk about territorial investment but “to talk about growth and employment creation”. However, he emphasised that Catalonia will “receive investment for its priority projects” to become “one of the main engines for the economic recovery” in Spain. In addition, he pointed out that the Catalan Government is receiving financial assistance from the Spanish Government, which acts as its only bank since the Spanish Government is blocking the Autonomous Communities’ access to international financial markets in order to get liquidity.

Catalonia’s is Spain’s wealthiest area, representing 18.9% of the country’s GDP and having an economy larger than Portugal’s. In addition, it is the second most populated area, containing 15.7% of Spain’s total population. However, in 2014 it will only receive 9.6% of regional investment, despite the Spanish Government’s public statement that the area has to become “one of the main engines for the economic recovery” in Spain. With a planned investment of €944.42 million, Catalonia ranks below Andalusia (€1,697.74 million and 17.3% of the total), Castilla y León (€1,399.47 million and 14.3% of the total) and Galicia (€1.353.82 million and 13.8% of the total). The Spanish Government’s total territorial investment accounts for €9,786.95 million. Catalonia is followed by Madrid (€909.08 million and 9.3% of the total) and the Valencian Country (€605.80 million and 6.2%).

Of the €944 million to be invested in Catalonia, €894.23 million will be allocated by the Ministries of Transport and Agriculture. The remaining €50.19 million will be invested by the remaining Spanish Ministries.