autonomous communities

Quim Torra believes easing measures with hospitals "overloaded" and without mass testing is "reckless"

Spain’s call for Catalan leaders to attend the upcoming Autonomous Communities’ summits to discuss regional policies has not changed the Government’s plan for the meetings. The Catalan Vice President and Catalan Minister for Economy and Tax Office, Oriol Junqueras, have refused to attend the Council on Fiscal and Financial Policies (CPFF, going by its Catalan initials) this Thursday, citing other political commitments. Catalan Secretary of Economy, Pere Aragonès, will go instead. For his part, Catalan President, Carles Puigdemont, has already announced he will not attend the Conference of Presidents convened by the Spanish President, Mariano Rajoy, for the 17th of January. “Catalonia has won the right to a bilateral relationship as the demands of the Catalan people have nothing to do with the requests of other Autonomous Communities”, Puigdemont said in October, when he announced that he would not be attending the conference.

Autonomous Communities in Spain should have “greater power to mobilise their own revenues”. This is one of the main pieces of advice the International Monetary Fund (IMF) gives in its monitoring report of the Spanish economy. The text stresses that “without reforms”, the Spanish regional financing framework remains “a risk for the achievement of fiscal targets”. “Reforms should aim to improve regions’ incentives to comply with fiscal targets while accounting for their different economic capacities”, adds the report. In this regard, it proposes a “more automatic and stricter enforcement of targets” and giving the regions greater autonomy to mobilise their incomes. Furthermore, the IMF urges Spain to reduce value-added tax exemptions and excise duties and environmental levies.

In times of economic crisis, the Mariano Rajoy-led Spanish Government has been making recentralisation a main driver of its political agenda, using the economic recovery as the reason for passing the reforms. An additional step in this direction was taken on Monday with a new regulation forcing Spanish Autonomous Communities to seek permission from the Spanish Ministry of Finance before granting loans and guarantees to private companies located in their territories. From now on, Madrid's permission will be conditional upon the applicant's compliance with deficit targets. The new regulation substantially curbs the Autonomies' powers to shape their industrial policies, following a reform passed in May that modifies both the Organic Law for Financing the Autonomous Communities and the Organic Law on Budgetary Stability and Financial Sustainability.

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.

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.

The European Commission has warned Spain about its budget for 2015 and the possibility of meeting the global deficit target of 4.2%. It has asked the Spanish Government to adopt the necessary measures to guarantee that the 2015 budget will respect the Stability and Growth Pact. The Spanish Minister for the Economy answered back and affirmed that no additional measures will be adopted since the planned budget and the forecast economic growth “are enough”. The Commission also demanded that the Spanish Government put “more pressure” on the Autonomous Communities that will not meet their deficit target for 2014, which is likely the case of Catalonia. Brussels directly asked for the implementation of “corrective measures” in these cases. However, the Commission did not make any comment on whether such deficit targets unilaterally imposed by Madrid are fair or realistic. In fact, the Catalan Finance Minister accused the Spanish Government of putting the blame on the Autonomous Communities and “discrediting” them, in order to recentralise powers. 

Catalonia's self-government might be suspended in the coming weeks if the Catalan authorities organise the self-determination consultation vote on the 9^th of November, suggested the Spanish Minister for Foreign Affairs, José Manuel García-Margallo. The week after 1.8 million Catalans formed an 11km-long mosaic to support November's non-binding vote, García-Margallo stated that the Spanish Executive will use "all the means at its disposal" to stop such a vote from happening; all the means "within the Law, but using all the Law", he added. A few hours later, before the Spanish Parliament, García-Margallo was asked about this statement, which he confirmed. He also dared to talk about an armed intervention but ruled out the possibility of "putting out the tanks", because "that does not seem to be within the Constitution". Catalonia's autonomy was restored in Autumn 1977 and it was one of the most essential pillars of Spain's democratic transition and of the Constitution approved in December 1978.

In 2015 the employees of the Catalan Government and related institutions and public companies will receive their full salary once again after having suffered a 7.5% reduction over the last 3 years. The Spokesperson for the Catalan Government and Minister for the Presidency, Francesc Homs, announced the measure on Tuesday, after the weekly Cabinet meeting. Furthermore, the Executive will also stop the 15% reduction of working hours and salary of temporary workers in the public sector. Those austerity measures were approved in the 2012 budget as a drastic way to cut public spending in order to reduce the public deficit. The Spanish Government has been unilaterally imposing strict deficit targets on the Catalan Executive while it maintained an unfair inter-territorial fiscal scheme with Catalonia and reduced its resources. In fact, the Spanish Government and most of the other Autonomous Communities did not reduce public salaries in the worst years of economic crisis, while the Catalan Government was the first one to launch the ambitious austerity plan.

On Friday the Spanish Tax Agency delivered a summons to the historical leader of Catalan nationalism, Jordi Pujol, who confessed two weeks ago that his family had non-declared money from his father's inheritance in fiscal paradises for more than 35 years. Also on Friday, the Barcelona judge investigating the case requested that Pujol hand in his father's last will and the document accepting the inheritance. In addition, the judge sent petitions to Andorra and Switzerland for financial information about Pujol, his wife and his 7 children. Several media outlets have reported that 4 of Pujol's sons could have fortunes abroad, allegedly out of tax control and coming from corrupt activities. Meanwhile, the person who chaired the Catalan Government between 1980 and 2003 and was essential in Spain's democratic transition and modern history, has been cast out of the party he founded (CDC) and has had all his official honours, pension and office taken away from him.

The Catalan Government, alongside the executives of the Basque Country and Castile and León, is leading the index of Autonomous Communities in terms of transparency, according to a study issued on Thursday by the organisation Transparency International Spain. These three Autonomies scored 100 out of 100 in the study, which was based on 80 indicators. They were followed by La Rioja (96), Galícia (94) and the Balearic Islands (93). The Region of Madrid occupies the last position in the ranking, with 65 points, behind the Region of Múrcia (79), the Canary Islands (80) and Castilla-La Mancha (84). The average across Spain is 88.6 out of 100. The study called upon regional governments to indicate the exact location of various data and information about elected officials, political appointments, organisation and personal wealth.

The Spanish Government has sent a Budget Plan to the European Commission, following the new rules giving Brussels greater control on Member State finances. The plan’s scope includes all government levels in Spain. In the plan, the Spanish Government imposes a global budget adjustment of €8 billion on the Autonomous Community governments, including Catalonia’s, to be achieved within the next two years. €2.14 billion would come from increasing revenue next year, since Madrid considers that the Autonomous Communities can still increase their own taxes, particularly those linked to the environment. €1.93 billion would come from further budget cuts. This would total €4.07 billion in 2014, which would roughly be repeated in 2015.