agreement

Pro-independence radical left CUP’s General Assembly, set up to vote on current President Mas’ investiture, ended in a tie. 1,515 participants opted for rejecting Mas’ candidature and continuing negotiating until the 9^th of January and 1,515 supported cross-party list ‘Junts Pel Sí’s proposal, including Mas’ investiture. CUP’s number one, Antonio Baños, defined the Assembly’s tie as “a challenge” rather than a problem. “‘Junts Pel Sí’ has the opportunity to make another proposal, as that which is laid on the table doesn’t have majoritarian support” stated CUP MP Anna Gabriel. However, ‘Junts Pel Sí’s top member, Raül Romeva, insisted on Mas’ candidature as “the proposal is still valid”. CUP’s Political Board will meet on Saturday to decide the next step and if there is not an agreement by the 9^th of January, new elections will be called automatically.

The eyes of Catalan politics will be set this weekend on pro-independence radical left CUP’s General Assembly, which according to CUP members Natàlia Sànchez and Xevi Generó “will probably be CUP’s most decisive assembly yet”. The 4,000 CUP members registered to attend the event won’t only have to decide on whether to instate current Catalan President Artur Mas but also on the social action plan presented by cross-party list ‘Junts Pel Sí’, as well as discussing the basis to start building the Catalan Republic. The assembly will mark the end of the negotiation process between pro-independence forces CUP and ‘Junts Pel Sí’, which started right after the 27-S Catalan Elections. 

The results of the 20-D Spanish Elections will force the political parties to reach agreements, as none of them have obtained an absolute majority of 175 MPs. Anti-Catalan nationalism ‘Ciutadans’, which obtained 40 MPs in the 20-D, have proposed a coalition whereby they, the conservative People’s Party (PP) and the Spanish Socialist Party (PSOE) would unite against “those who want to break the country apart”. “If there isn’t a roadmap for change, there won’t ever be stability and the populists will take advantage of our system’s decadence” warned Ciutadans’ leader, Albert Rivera, and added that “Spain is not negotiable”. Ciutadans’ offer comes after the PSOE refused the PP’s proposal to reach an agreement. The PSOE’s leader, Pedro Sánchez, insisted on their ‘no’ to Mariano Rajoy and assured that they would work to form a government of change. 

The negotiations between cross-party list ‘Junts Pel Sí’ and radical left CUP reached their deadline this Tuesday. The pro-independence forces have agreed on a 63-page proposal to start building the Catalan Republic and establish the legality of this constitutive process. Now the document will have to be validated by CUP’s base, which will gather this Sunday at the party’s General Assembly. “We are continuing with our democratic commitment” stated 'Junts Pel Sí' top member Raúl Romeva, who highlighted that they are following the “citizens’ mandate expressed in the 27-S elections”. Regarding CUP’s veto against current Catalan President Artur Mas, who is 'Junts Pel Sí's only candidate, Romeva emphasised that they “will instate a presidency rather than a president” and restated their proposal of “a collegiate presidency composed by a President of the government and three government commissions”. 

The negotiations between pro-independence forces radical left CUP and cross-party list ‘Junts Pel Sí’ to constitute a new government in Catalonia are continuing. The results of the 20-D Spanish Elections and the victory of alternative left coalition En Comú Podem in Catalonia and the good result of left wing ERC show that Catalonia is turning to the left, according to CUP. The party has therefore reinforced their ‘no’ to instating Artur Mas as Catalan President and has called on ‘Junts Pel Sí’ to propose “an alternative presidency which could generate a greater consensus”. CUP has also invited En Comú Podem and their partners in the Catalan Parliament, Catalunya Sí que es Pot, to join the “constitutive process of the Catalan Republic”.

PSC is the Catalan branch of the Spanish Socialist Party, a force which has alternated in the Spanish Government with the People’s Party (PP) for the last 32 years. Their influence in Catalonia started to decline in 2010 in favour of nationalist and pro-independence parties. Now the Socialists are the third force in the Catalan Parliament and the opposition party in Spain’s Congreso de los Diputados. However, many polls claim their key position in the Spanish chamber might be overtaken by alternative-left Podemos or anti-Catalan Nationalist Ciutadans, both running for the Spanish Elections on the 20-D for the first time. PSC’s candidate for Barcelona, former Spanish Minister of Defence Carme Chacón, is convinced that the Socialists are the only guarantee “to chase Mariano Rajoy out” from the Spanish government and restore “the dialogue” between Catalonia and Spain. 

The Spanish Socialist Party (PSOE) closed the door Monday on supporting a hypothetical specific economic agreement between Catalonia and Spain, similar to the specific fiscal pact already in existence for the Basque Country, which would recognise Catalonia’s “specificities”, strengthen its self-rule and better fund its institutions, public services and infrastructure. However, the PSOE did urge the Spanish Government “to update” the current inter-territorial fiscal scheme in order to improve the funding of Autonomous Communities such as Catalonia, calling for “a fairer and more equitable model”. A majority of Catalan society has been asking for such a fiscal agreement for many years, which would help reduce the chronic fiscal deficit while keeping solidarity with poorer regions.

The President of the Catalan Government, Artur Mas, presented on Monday the model for Catalonia's own Treasury, which will be developed should "the political conditions" be there, he stated. "This is the most serious attempt to build our own Treasury in the last 300 years", stressed Mas. "After two years of work, we are ready" to launch and Catalans should not waste "this great opportunity", he stressed. "Without our own Treasury, there is no real self-government", the Catalan President stated. The system would include Catalonia's own Tax Agency and  is inspired by the taxation authorities in countries such as Sweden, Denmark and Australia, which prioritise cooperation with taxpayers over controlling them. In these models, efforts are concentrated on severely persecuting tax evaders and underground economy, while the vast majority of tax-payers who deal correctly with their fiscal obligations receive assistance and have unlimited access to their fiscal data.

The International Monetary Fund (IMF) has reviewed and improved its economic growth forecasts for Spain, going from a 2.5% growth rate for 2015 forecast in April to a 3.1% one foreseen this June, and from 2% to 2.5% for 2016. However, the IMF has also issued recommendations and warnings, emphasising that Spain will have to carry out "additional fiscal efforts" and "structural reforms" in order not to jeopardise the country’s economic recovery. The IMF recommends that Spain reduce the costs of public healthcare and education by making users pay for part of the services. According to the international organisation, Autonomous Community governments – such as Catalonia's – should have greater fiscal responsibilities in such systems since they exclusively manage them. In this vein, the IMF has praised the fiscal consolidation efforts undertaken over the past few years by regional governments and has asked for an increase in their funding and fiscal powers, as well as for the adapting of the deficit targets to their needs.

The Autonomous Community governments, such as the Catalan Executive, cannot meet the deficit objectives imposed by the Spanish Government because of the current inter-territorial fiscal scheme, according to a report from the Spanish banking giant BBVA. The bank has published two studies on two consecutive days that shed some light on this scheme and its consequences. In the first report, the BBVA states that spending per capita on basic Welfare State services, such as healthcare and education, varies by 60% among the Autonomous Communities. A second report highlights that the Spanish Executive reduced the funds for the Autonomous Community governments in 2014, despite the economic situation and the intake of public revenue improving. On top of this, it refuses to review a fiscal scheme that legally expired 16 months ago and that was designed before the financial crisis.

The Catalan Government President and leader of the centre-right pro-Catalan State coalition CiU, Artur Mas, complained on Wednesday that his ally, the left-wing pro-independence party ERC, is not fully honouring their agreement to call elections on 27 September, which should become a 'de facto' vote on independence. According to Mas, the ERC is not offering its full parliamentary support to the Government. "There is an agreement signed in January, and it is also an agreement that talks about stability until elections are called" and "some [parliamentary] votes are being lost, which harm such a stability agreement", he said. Furthermore, he stated that elections will be "expectedly" held on 27 September and did not rule out the option of running in a cross-party list yet. The leader of the left-wing party, Oriol Junqueras, replied that the ERC is honouring the agreement and that Catalans will vote on 27 September.

According to a study by the Professional Association of Economists of Catalonia (Col·legi d’Economistes), an independent Catalonia would obtain a much better grade from rating agencies than it currently gets, taking into account its diversified economy and higher GDP per capita than the European average. Specifically, it would obtain an A+ rating, 7 levels higher than the current BB ‘junk bond’, using Standard&Poor’s classification. The study highlights that without the current fiscal deficit with the rest of Spain, the rating would be “at least” that of the Basque Country and would enable the Catalan Government to access the international financial markets. Catalan taxpayers pay much more to the Spanish Government than the amount they get back in terms of services and infrastructure; a fiscal deficit equivalent to between €13bn and €17.5bn per year.

The Catalan Government is expecting to post a 2.2% deficit for the whole of 2014, corresponding to some €4.41 billion. However, the definitive figure will not be known until March. This is more than  double the 1% deficit target that the Spanish Government unilaterally imposed on the Catalan Executive. Over the last few years, the two governments have quarrelled about deficit targets, since the Spanish Executive is imposing much stricter objectives on the Autonomous Communities than those it allows itself, despite regional governments exclusively managing and funding the basic Welfare State services such as healthcare and education. For instance, for 2014, the Spanish Government only allowed the Autonomous Communities to only have 15% of the whole deficit allowed by the European Union to Spain’s entire public sector, despite managing some 35% of the country’s public funds and basic services.

The President of the Catalan Government, Artur Mas, assessed on Tuesday the Executive’s work during 2014, which he found to be “positive” overall, although he admitted there are still many people in great need and many social and economic challenges ahead. Referring to the current debate on whether to call early elections transformed into a ‘de facto’ referendum on independence from Spain, Mas promised immediate decisions to be announced on Thursday. Before taking the definitive decision and after weeks of admitted “confusion”, the Catalan President wants to hold a last round of talks with the main civil society organisations supporting independence and the left-wing pro-independence party ERC – with whom the governing centre-right pro-Catalan State coalition CiU has shared a parliamentary stability agreement for the last 2 years. “I will not slack” in the self-determination process, Mas stated.

Miquel Iceta, First Secretary of the Catalan Socialist Party (PSC), proposed his road map for the coming two years: no early elections and broad Constitutional Reform to better fit Catalonia into a federal Spain. On Wednesday Iceta held his own conference after those of the Catalan President and leader of the centre-right pro-Catalan State coalition (CiU), Artur Mas, and the left-wing independence party (ERC), Oriol Junqueras. While the two others support independence, Iceta opposes it. He totally rejected the road maps proposed by Mas and Junqueras and insisted on the need to work "on the real problems of Catalans", such as poverty, unemployment, budget cuts in public healthcare, etc. However, the PSC leader admitted that "there will be no solution without a vote", but "a real vote". Iceta said that before breaking up with Spain, Catalans should be allowed to vote on "a new agreement" to remain in Spain. In order to facilitate such a new agreement, he proposed that the Spanish Government cancel part of the Autonomous Communities' debt.