austerity

Public employees of the Catalan Executive will receive their full salary in 2015. For the last 3 years, they have earned some 7% less in order to meet the strict deficit targets unilaterally imposed by the Spanish Government. The Catalan Government has approved a decree on Tuesday setting the full salary’s restitution, but the measure will not be “100% guaranteed until the new budget for 2015 is approved”, stated the Catalan Minister for the Presidency, Francesc Homs. The governing centre-right pro-Catalan State coalition CiU and the opposition left-wing independence party ERC are currently negotiating this new budget, although the ERC has thus far been reluctant to support it. The CiU and the ERC have been negotiating for the last few weeks over whether to call early elections in order to transform them into a ‘de facto’ plebiscite on independence, and whether they should run together or not. The 2015 budget is also part of this debate.

The Spanish Finance Minister, Cristóbal Montoro, has confirmed a new fiscal measure to increase the Autonomous Communities’ revenue, benefiting the Catalan Government as well. After the Council on Fiscal and Financial Policies (CPFF) held on Tuesday evening, Montoro confirmed that interest rates will be set at 0% for the loans given to the regional governments since 2012 through the Liquidity Fund (FLA). The measure will also be in place for 2015. However, the Autonomous Communities that have already met the deficit targets will also be granted a 0% rate for 2016 and 2017. The Catalan Government welcomes the measure but is sceptical about its details. The Catalan Finance Minister, Andreu Mas-Colell, demanded an entirely new funding scheme, since the current one expired a year ago. Montoro is not renewing the inter-territorial funding scheme and instead is using this loan system, which obliges regional governments to return the transferred funds.

The left-wing independence party ERC has joined the governing centre-right pro-Catalan State coalition CiU in allowing the Catalan Government’s budget bill for 2015 to continue its parliamentary approval process. Although critical of the budget proposal, the ERC backed the centre-right coalition in the hope that Catalan President and CiU leader Artur Mas will call early elections in the coming weeks, which are likely to be transformed into a ‘de facto’ referendum on independence. The CiU and the ERC have a different approach towards any such elections and have been negotiating for a number of weeks. The approval of the 2015 budget has become an additional element of the talks, a fact which has been criticised by the other parties. On Thursday, the CiU and the ERC rejected the full amendments filed by the rest of opposition parties. 

The left-wing independence party ERC announced it will not block the Catalan Government's budget proposal for 2015, which should allow the bill to continue its parliamentary approval process. ERC's decision comes within the negotiations with the governing centre-right pro-Catalan State coalition CiU to run together or separately in early Catalan elections that should be transformed into a 'de facto' referendum on independence. The CiU is missing 18 MPs to get the absolute majority and it needs the votes or the abstention from at least one other group to approve next year's budget. The ERC and the Catalan Socialist Party (PSC) are the only two groups that could enable the bill to pass, although they do not seem willing to do so. By not blocking the budget, the ERC is "facilitating" an agreement with the CiU. However, they are expecting the new budget not to be approved in the end because early elections should be called, although they "do not rule out any scenario".

In 2011 and 2012, funds for scientific research in Catalonia dropped from €277 million to €224 million, a 19% decrease, according to a study issued on Friday by the Catalan Association of Public Universities. Despite this drastic budget reduction, scientific production has managed to keep similar levels to previous years and continue standing at levels similar to those in countries such as the UK or Belgium. The report compiles the main research and innovation indicators for 2011 and 2012. However, the main representatives of public universities warn that scientific production is at risk and could drop to pre-2010 levels if the budget situation does not shift. They also highlighted that public universities in Catalonia have the challenge of attracting greater private investment for its research projects.

The Catalan economy’s indicators are posting positive figures and the research department of the BBVA bank has reviewed its growth forecast for Catalonia for the current and the next years. According to the report issued on Thursday by the BBVA, the Catalan economy will grow by 1.3% in 2014 and by 1.8% in 2015, which are higher rates than those initially predicted. On top of this, 140,000 new jobs will be created in those two years, which represents a 4.3% employment growth. In addition, it puts an end to the negative trend that destroyed 17.3% of the existing jobs between 2008 and 2013. The BBVA also praises “the very significant effort” made by the Catalan Government to reduce public deficit in the last few years, although they will not be enough to meet the strict deficit objectives for 2014 and 2015, unilaterally imposed by the Spanish Government.

On Wednesday, the Spanish Finance Minister, Cirstobal Montoro, refused to start negotiating and launching a new funding scheme for the Autonomous Communities before 2016, even though the current model had to be reviewed before January 2014. The Catalan Government has been insisting on its review since 2012, since the system does not properly fund basic public services such as healthcare and education in times of economic crisis, areas which are entirely managed by the Autonomous Communities. In addition, Catalonia suffers a permanently high fiscal deficit: each year Catalan taxpayers have to give away some 8.5% of Catalonia’s annual GDP to fund services and infrastructure in poorer regions in Spain. The problem is that after such transfers, public services in the poorer parts of Spain have more money per inhabitant than the Catalan ones and basic infrastructure in Catalonia is not built. The Spanish Government has been postponing the new model, despite the territorial tensions and the self-determination demands.

On Sunday the Spanish Socialist Party (PSOE) approved another solemn declaration proposing a Constitutional Reform, after it already did so in July 2013. Once again the PSOE has not detailed their proposal, but insists on building a true federal model, going beyond the current Autonomous Community system. The People's Party (PP) – which runs the Spanish Government – opposes such a reform although they "agree to talk" about it. The PSOE wants the PP to "immediately" approve the creation of a Constitutional Reform committee at the Spanish Parliament and set expert hearings to debate ideas. However, they do not want "to rush" to solve Catalonia's "urgent problem", as explained by the President of Andalusia and PSOE's Chairperson, Susana Díaz. Meanwhile, the alternative left party Podemos, which could win the next Spanish elections, has elected Pablo Iglesias as its Secretary General, who has promised a broad Constitutional Reform. Iglesias recognises Catalonia's right to self-determination but considers that the Catalan Government cannot approve a unilateral declaration of independence.

The left-wing Catalan independence party ERC, which has shared a parliamentary stability agreement with the governing centre-right pro-Catalan State coalition CiU for the last 2 years, is pushing to begin a new political period. The ERC’s leader, Oriol Junqueras, met on Thursday with the President of the Catalan Government and CiU’s leader, Artur Mas, and confirmed to him that they will not back the new budget for 2015. The evening before, Junqueras had presented his road map for the next few months. The ERC wants early elections now, which would become “constituent elections” if a majority of pro-independence parties were to win. Furthermore, the ERC prefers to run alone, not in a shared electoral list. If Catalans voted for a majority of pro-independence parties, the new Parliament would start building the new state’s basic structures and drafting a Constitution, which would have to be later ratified through a binding referendum.

The President of the Catalan Government, Artur Mas, assessed November 9's participatory process, when 81% of the 2.3 million participants voted for independence, despite the Spanish Government's obstacles and threats. On Tuesday, Mas asked the Spanish Prime Minister, Mariano Rajoy, to stop ignoring reality and start negotiating a mutually-agreed referendum on independence, like that in Scotland and Quebec. Taking into account Rajoy's attitude for the last 2 years, Mas was said to be "quite sceptical" but highlighted that Catalan representatives have always wanted a mutually-agreed vote, which is "the best" option. Mas also announced he was starting a round of talks with pro-self-determination parties – including the Socialists (PSC) – "to listen to everybody" about organising plebiscitary elections. In fact, he warned Rajoy that plebiscitary elections on independence can be called if he continues to refuse to negotiate. Besides, Mas confirmed that on Saturday that the Catalan Government's website had suffered a cyber-attack on a gigantic-scale, which was "organised by professionals".

On Sunday, Catalans are being called to give their opinion about independence in a participatory process, organised by the Catalan Government in cooperation with more than 40,000 volunteers and many town halls, which replaces the original consultation vote also scheduled for the 9^th of November. The Spanish Government appealed against the first vote, the Constitutional Court suspended it, the Catalan Government launched an alternative process and the Spanish Government filed a new appeal, accepted by the Constitutional Court. However, this time the non-binding participatory has been maintained with a wide consensus among Catalan institutions a wide representation from the civil society. These are the three last steps of an intense self-determination process, which started with the approval and trimming of the Catalan Statute of Autonomy and was shaped by four massive demonstrations and a series of "no" and threats by the Spanish authorities. Here is a summary of the main milestones of this process before the massive pro-independence demonstration of 2012.

Photographer Colita has rejected the National Photography Prize awarded by the Spanish Ministry of Culture because of "the pitiful, shameful and painful" situation of the cultural sector in Spain. Colita, who was one of the main photographers portraying Barcelona's bohemian life of the 1960s, 1970s and 1980s, did so after another Catalan artist, the world-famous musician Jordi Savall, did the same last week for similar reasons. In both cases, the two artists highlighted that their reasons for rejecting the award were linked to the Spanish Government's cultural policies and had nothing to do with its blocking attitude towards Catalonia's self-determination process. Colita ironically stated that she "does not know where [the Spanish Ministry of Culture] is located, neither if it exists".

While the alternative consultation vote on independence scheduled on the 9^th of November approaches, the Catalan Government has additional priorities on its plate, starting with the approval of its budget for 2015. However, right now the governing centre-right pro-Catalan State coalition CiU does not have enough parliamentary support to approve it. Its parliamentary ally, the left-wing independence party ERC, is reluctant to back the new budget after the Catalan Government cancelled the original consultation vote. The ERC wants to start preparing the first budget of an independent state and on Tuesday it offered to extend the 2014 budget. However, the Catalan President, Artur Mas, announced on Wednesday he will bring the budget proposal to the Parliament anyway. The Catalan Socialist Party (PSC) offered itself as an ally, but Mas asked them to back the alternative consultation vote. The PSC replied that if the question is changed, "we can talk about everything".

In 2015, Catalonia will receive the lowest investment from the Spanish Government in the last 17 years, in relative terms. The Executive chaired by Mariano Rajoy will only spend 9.5% of the territorial investments in Catalonia, despite the fact that the Autonomous Community accounts for 19% of Spain's GDP and 16% of the country's population. The percentage is even lower than last year's, when Rajoy allocated 9.6% of the territorial investments to Catalonia, which leads Spain's economy. In the current political climate, when the relation between Catalonia and Spain is seriously questioned by a majority of Catalans, such figures are far from supporting the "better together" way.

Andreu Mas-Colell, the Catalan Government's Minister for Finance, emphasised that he cannot implement further budget cuts without "severely deteriorating" basic public services. After Catalonia's ministerial spending having dropped by an average of 20.3% with continuous budget cuts since 2010, public spending reduction has reached its "limit", argued Mas-Colell. The Catalan Government has exclusive control over public healthcare, education and social policies, while most of its revenue depends on transfers from the the Spanish Executive, which collects the taxes paid by Catalan citizens. Once again, Mas-Colell accused the Spanish Government of "strangling" Catalonia's finances by recentralising power. He announced he will not carry out an additional €3.3 billion budget reduction in 2015 and asked Madrid to honour pending debts, modify the too-strict deficit targets and review Catalonia's funding scheme.