agreement

The President of the Catalan Government, Artur Mas, was responding to the recent concerns raised by the President of Spain’s main employers’ association CEOE and by a group of 60 German businesspeople. Mas praised the “strength” of Catalonia’s economy, being “the most dynamic in southern Europe”. He stressed that Catalonia is leading the attraction of foreign investment in the whole of southern Europe. Furthermore, in the first 6 weeks of the current year, German companies have already announced €131 million of direct investment in Catalonia. Spanish nationalist parties have stated that the self-determination claims create instability and companies do not like this. Mas replied that Catalonia “has already tried out absolutely everything [to better fit within Spain] and the answer has always been the same: ‘no, no and no, and ten thousand times no’”.

The Catalan Centre for Polling (CEO), linked to the Catalan Government, published “an experimental poll” based on 1,830 interviews on 10 different future scenarios, such as an independent Catalonia within the European Union, an independent Catalonia being expelled from the EU and independence bringing a positive economic impact. In the event that the Spanish Government insists in not changing anything regarding the current relationship between Catalonia and Spain, 62.7% of Catalans would vote “yes” in an independence referendum while 22.5% would oppose it and 7.8% would abstain. It is the highest-ever support to independence registered in an opinion poll. On the other hand, if the EU automatically expelled Catalonia if its citizens were to vote for independence, 45.4% would still vote “yes”, 37.6% would vote “no” and 12.7% would abstain. For all scenarios independence is the clear winner.

The Catalan business community is deeply annoyed with the Spanish Government for not publishing transparent data on Catalonia’s fiscal contribution to the rest of Spain and therefore not recognising the fiscal deficit. The Spanish Finance Minister, Cristóbal Montoro, was supposed to issue the so-called fiscal balances last December but their publication was inexplicably delayed. Last Friday, in late January, Montoro announced the fiscal balances would no longer be calculated and published in the present form; instead, he would publish in March the “regionalised public figures” stating the costs of public services per citizen because the fiscal balances were “incomplete and incoherent”. However, on Tuesday, the Minister recognised that they were “correct” but “wrongly used” to support Catalan independence claims.

The Catalan Socialist Party (PSC) proposes a “singular redefinition” of Catalonia’s “fitting” within Spain that should be accomplished urgently while waiting for a global reform of the Spanish Constitution. Maurici Lucena, the PSC Spokesperson at the Catalan Parliament, told the CNA that this temporary measure should avoid “the collision” between the two sides. The measure should “shield” Catalonia’s powers, language and culture from recentralisation and homogenisation attempts, and it would also include a fairer fiscal scheme. In the coming weeks, the PSC will try to convince the PSOE – to which is federated – about it. This proposal is quite similar to the Catalan Statute of Autonomy that was approved in 2006, but trimmed in 2010 by the Constitutional Court following an appeal from the People’s Party (PP) – which now runs the Spanish Government.

The Spanish Prime Minister replied on Tuesday to the President of the Catalan Government’s proposal to discuss in a private meeting the question wording, date, and procedure of Catalonia’s self-determination vote. The Financial Times had also urged the Spanish Government to negotiate and make an offer to Catalans, while adding that “the ingredients” for a solution can be found in Catalonia’s question. While Mariano Rajoy answered he was open to meet with Artur Mas, he added he has nothing to negotiate on and nothing new to say. “The [Spanish] Government will not make any concession” regarding Catalonia’s self-determination. In addition, Rajoy insisted the vote “will not take place”. Furthermore, he added that Catalonia will not have a special funding scheme.

The President of the Catalan Government, Artur Mas is the most senior public figure in Catalonia, just after the King of Spain and the Spanish Prime Minister. However, at Thursday’s scheduled dinner with the main Catalan business association ‘Foment’ and the Spanish Deputy Prime Minister, Soraya Sáenz de Santamaría, a last-minute change in the protocol put Mas in second place. The Catalan President considered that “conditions had changed” and as a protest he announced he was not going to the dinner. Instead, the Catalan Minister for Business and Employment was representing him. ‘Foment’ has been ambivalent regarding Catalonia’s self-determination process, although it supports the claim for finding a negotiated way out of the current political situation by organising a legal referendum.

The President of the Catalan Government and leader of the Centre-Right Catalan Nationalist Coalition (CiU), Artur Mas, and the Left-Wing Catalan Independence Party (ERC) agreed on speeding up the process of building “state structures” and drafting the “most social budget” in Catalonia’s recent history. In addition, Mas criticised the ‘third way’ between independence from Spain and the current situation proposed by the Catalan Socialist Party (PSC) and CiU’s ‘number 2’, saying that Catalans “have been trying” this way “for the last 100 years” and “it has never worked”. Spanish nationalist People’s Party (PP) and Ciutadans (C’s) called on Mas to stop the self-determination process. However, the main Catalan parties, from left to right and representing 77% of the parliamentary seats, presented a common text supporting Catalonia’s right to self-determination through a legal vote.

The Wealth Transfer Tax, which is levied on sales of second-hand housing units and any other used real estate, will be raised from 8% to 10% as from the 1st of August. The Catalan Government expects to earn an additional €50 million in 2013 and €150 million in 2014. The Catalan Finance Minister, Andreu Mas-Colell, argued that the rise in the tax rate is equivalent to the VAT charged on sales of new housing units and that both taxes should be “parallel”. He also added that other Autonomous Communities had previously raised this tax to similar levels.

On Tuesday, the Catalan Government posted the so-called fiscal balances for 2010, showing the difference between the money paid by Catalans in taxes and fees to the Spanish Government and what comes back in form of funds, services and infrastructure. Using the monetary flow formula, Catalonia had a fiscal deficit of €16.54 billion, representing 8.5% of its GDP. Using the benefit formula, the fiscal deficit represents 5.8% of the Catalan GDP (€11.26 billion). The Catalan Finance Minister, Andreu Mas-Colell, stated that both formulas “are complementary” but he found the monetary flow one to be closer to the reality. The figures are similar to the results from previous years as well as to the study published in 2008 by the Spanish Finance Ministry with data from 2005. In the last 25 years, Catalonia has given away 8.1% of its GDP each year.

According to Catalan and Spanish Government sources, the Spanish Prime Minister, Mariano Rajoy, and the President of the Catalan Executive, Artur Mas, secretly met this week in Madrid. They mainly talked about the deficit targets for 2013 and Catalonia’s self-determination process. It is the first time they have held a meeting in the last 6 months. On the first issue, they agreed on the need to relax the current 0.7% deficit objective, which would oblige the Catalan Government to carry out a budget adjustment of almost €4.5 billion. No specific figure has been decided on, but Mas said that it will be between 1.5% and 2%, depending on the European Union’s decision regarding Spain’s total deficit. Regarding the self-determination vote, they see things very differently and Rajoy continues to refuse to allow such a vote.

The Spanish Finance Minister, Crístobal Montoro, confirmed that if Brussels relaxes Spain’s total deficit target for 2013, he will share this flexibility with the Autonomous Communities’ governments. A working group has been created to analyse the most convenient formula for this, including that of setting different deficit targets for each Autonomous Community. The Catalan Government celebrated the decision, since it has been asking for it for many months. In addition, the Catalan Finance Minister, Andreu Mas-Colell, stated that he will look for “a smooth relationship” with the Spanish Executive to negotiate the details. On Wednesday, Mas-Colell proposed the idea that deficit targets could be set according to debt levels. In the last few days, the Catalan Government has sent several messages in order to show a willingness to talk to Rajoy’s cabinet about the most important subjects on the table.

The latest political poll issued by the Catalan Survey Centre (CEO), published every three months, shows that 54.7% of those interviewed would vote “yes” in an independence referendum, while 20.7% would vote “no” and 17.0% would abstain. Three months ago, the “yes” option was backed by 57% of the interviewees while in February 2012 it was only backed by 44%. Besides, 46.4% of citizens would support an independent Catalan state as their first choice, which represents an increase of 2.1 percentage points in three months and a 17.4 point increase in one year. 22.4% would prefer a federal Spain, 20.7% the current situation and 4.4% Catalonia being a region within a more centralised Spain.

The Cercle d’Economia, the main Catalan economic forum open to businesspeople and academics, has published an opinion note on the political context following the last Catalan elections. In the note, the Cercle asks the Spanish Government “to talk” about the Catalan self-determination and “to reform” the Constitution accordingly. The Cercle does not explicitly back an independent Catalonia but it supports a deep reform of Spain’s territorial organisation and the finding of a negotiated solution for both parties, which may be reached through a legal referendum. In addition, the Cercle asks for a review of Spain’s internal distribution of the deficit targets among government levels and to increase those of the Autonomous Communities.

Artur Mas, leader of the Centre-Right Catalan Nationalist Coalition (CiU), has sworn the oath as President of the Catalan Government again, two years after he did it for the first time. After swearing office, Mas delivered a long speech in which he asked Spain to not put the will of Catalans to freely decide on their own future “behind bars”. He also compared Spain and Catalonia’s relations with “two boats” following a “collision course”. Mas stated that he is ready “to change direction” because otherwise “Catalonia will be adrift, and when you are adrift, you are the most likely to crash against the rocks”. The Spanish Finance Minister, Cristóbal Montoro, was present at the ceremony as the highest representative of the Spanish Government.

The Catalan Parliament has voted Artur Mas, leader of the Centre-Right Catalan Nationalist Coalition (CiU), in as President of the Catalan Government with the votes of his own group and those of the Left-Wing Catalan Independence Party (ERC). Mas has been re-elected in the first vote with an absolute majority of 71 affirmative votes from the 135 MPs. The rest of the opposition voted against him for two different main reasons: either because they opposed the budget cuts despite supporting the organisation of a self-determination referendum or because they opposed Catalonia’s self-determination altogether. Mas based his campaign on two main pillars: fighting the economic recession and the public finance crisis and pursuing “Catalonia’s national transition”.