Two employer associations reject Catalan President’s petition to support self-determination

Barcelona (ACN).- Spain’s confederation of employer associations, CEOE, and its Catalan member, Foment del Treball – which is the largest business organisation in Catalonia, have rejected getting involved in the self-determination process. On Friday, the President of the Catalan Government, Artur Mas, asked employers to get involved in all of Catalonia’s three main objectives: fostering the economic recovery, maintaining social cohesion through the Welfare State and enabling Catalonia’s self-determination. Addressing about one hundred employers last Friday, including some of the main business-owners in Catalonia, Mas had asked them to “work together” and play an active role in leading the Catalan society, not only in the economic fields but also in the political ones and to participate in the debate about Catalonia’s relation with Spain. On Monday, the Madrid-based CEOE and Barcelona-based Foment, which represent the business establishments at Spanish and Catalan level, answered Mas’ petition. The CEOE President, Juan Rosell, and Foment President Joaquim Gay de Montellà, rejected “getting involved” in the political debate. However, on previous occasions they have lobbied against independence and against self-determination, for instance last week. This Monday, Rosell and Gay de Montellà – who have met at Foment’s headquarters in Barcelona – asked for “dialogue” between Spanish and Catalan authorities to solve the current situation. On top of this, the Foment asked for a “fiscal agreement” for Catalonia, which should be similar to the funding scheme of the Basque Country and Navarra and should provide the Catalan economy with greater resources.

“We, employers, are not for making political agreements; our job is to make companies work” stated Catalan Juan Rosell, President of the Spanish CEOE, who is also the former President of Foment. “Helping, yes, but getting involved in a total and absolute way [in the current political debate regarding Catalonia’s and Spain’s future] is not our objective”, insisted Rosell. He also added that the economy needs “political stability” to recover from the economic crisis.

Foment asks for the “Fiscal Agreement”

Furthermore, the current President of Catalonia’s main employers association, Joaquim Gay de Montellà, also asked for stability. Gay de Montellà said that the mission of Catalonia’s main employers is “generating wealth and creating jobs”, but not participating in politics. However, at the same time, the President of Foment made a pretty clear political demand, since he asked for a “fiscal agreement” between Catalonia and Spain. Over the last few months, Foment has been openly claiming for such a model, which is similar to the one the Basques and Navarrans have. In addition, on previous occasions, Gay de Montellà has stated he is against independence from Spain.

Navarra and the Basque Country are not part of the general inter-territorial redistribution fiscal scheme, as opposed to Catalonia. These two Autonomous Communities have their own fiscal model, which sets a bilateral relationship with the Spanish Government and allows them to collect all the taxes generated in their territory. This model is known as the ‘Economic Agreement’.

A model rejected by the Spanish Government

Artur Mas proposed to discuss a similar model for Catalonia to the Spanish Prime Minister Mariano Rajoy in September 2012, just after the first massive demonstration asking for independence. This model had been previously claimed by Catalan parties and business associations on numerous occasions. Before the meeting with Rajoy, a majority of Catalan parties met to agree on the main guidelines of this ‘Fiscal Pact’, as it is known in Catalonia’s political jargon. However, back then, Rajoy rejected to even discuss it. Pushed by the independence claims from a wide share of the Catalan society, few voices in Catalonia defend such an agreement, which would now be perceived as a “too little too late” solution. On top of this, different members of the Spanish Executive and of the governing People’s Party (PP) have been repeating over the last few months that such a fiscal agreement is not and will not be possible for Catalonia.

The Fiscal Agreement is aiming at addressing the excessive fiscal deficit that affects Catalonia and damages the competitiveness of its economy and the quality of its public services. Each year, Catalan citizens and companies pay a certain amount of to the Spanish Government in taxes. Part of this money comes back to Catalonia in the form of investments, infrastructures and services. However, as a rich region, another part funds investments, infrastructures and services in other parts of Spain. The problem is that this fiscal deficit is excessive.

Catalonia’s fiscal deficit

Previous studies have shown that Catalonia’s fiscal deficit represents an average of 8% of its GDP (using the monetary-flow formula), which means that each year Catalans give away 43% of their taxes, some €16 billion per year. The Spanish Government only published this information once, in 2008 with data from 2005; it posted a fiscal deficit between 6.38% and 8.70% for Catalonia that year (depending on the calculation formula). Another study from the Catalan Government showed that an average of 8% of Catalonia’s GDP has been annually transferred to the rest of Spain between 1986 and 2010 using the money-flow formula (which is the most-commonly used calculation). This means that Catalans have given 200% of Catalonia’s GDP to the rest of Spain in 25 years; 200% of the Catalan GDP nowadays represents some €400 billion (equivalent to several Marshall Plans in nowadays money). The annual budget of the Catalan Government, which exclusively pays for public healthcare, education and social policies, amounts to €29.31 billion for 2014; in 2012 it posted a deficit representing 2.21% of Catalonia’s GDP (some €4.4 billion).