budget

The Catalan Government will be able to issue more public debt and the State will pay Catalonia 759 million euros that are pending from 2008. According to the Catalan Government, the Spanish Executive owes more than 2,100 million euros, although the figure could be larger. The Catalan President, Artur Mas, claimed this amount and the Catalan Government’s capacity to issue new debt, after having presented a viability and austerity plan a week ago. Both leaders discussed pending competence devolutions today regarding already approved legislation and agreements, but without concrete results. Prime Minister Zapatero was also very interested in this meeting as he wants to count on votes from Mas’ party in the Spanish Parliament. Mas confirmed that his party would support Zapatero’s measures to foster the economic recovery, such as the pension system reform agreement or a new framework for SMEs.

The Chairman of the Centre-Right Catalan Nationalist Group in the Catalan Parliament Oriol Pujol stated this morning that the Catalan Government could “practically not pay the salaries” of public workers. However the Catalan Government from the same party calmed public opinion saying that although the situation was difficult, civil servants would not need to worry. The Catalan Government needs new credits to get liquidity and is expecting authorisation from the Spanish Government.

The President of the Catalan Parliament Núria de Gispert presented the Chamber’s austerity plan today. Staff will be reduced by 10% within the next 4 years, official duty cars by 50% and the scheduled enlargement plan will be put on stand by.

The President of the Catalan Government Artur Mas said that his Cabinet would reduce the Government’s budget for 2011 by 10% in order to cut public deficit. Speaking at the Catalan Parliament today, Mas accused the Spanish Government of not having paid 1.000 million euros last year as agreed. “It is very easy to cut their own deficit by creating deficit to other administrations”, he emphasised.

In an interview with the Financial Times this weekend, the Prime Minister Zapatero threatened to intervene in some Autonomous Communities’ budgets. Today the Spanish Secretary for Economic Affairs reiterated this threat. However the Catalan Government has stressed that Catalonia has in fact no problem with its public deficit. Catalan political parties reminded the Spanish State that the Autonomous Communities only have one sixth of the entire public debt throughout Spain.

The new Catalan Government announced today that the budget for 2011 (currently the 2010 has been extended) will be ready within the next 4 months and approved before the summer break. The Government’s Spokesperson, Francesc Homs, said that for the first time, the budget will be “clearly smaller” than the previous year’s. In addition, the new Government asked for an external audit on the Catalan public administration’s finances.

Mas-Colell was a professor at Berkeley and Harvard universities. Most recently, he chaired the Barcelona Graduate School of Economics and was a professor at the Universitat Pompeu Fabra. He is a specialist in microeconomics and some of his publications are world-renowned references on the subject. Mas-Colell had already been Minister of the Catalan Government between 1999 and 2003, in charge of universities. Now he will be Minister for the Economy, Budget and Universities, stressing the importance of innovation and research.

The difference between what an autonomous community produces in terms of revenues and what it finally receives, once the Spanish State has redistributed those revenues among all the communities, has only officially been quantified once in history. It was in 2005, following an agreement of Prime Minister Zapatero with the Catalan nationalist forces. Catalonia’s political and business class have called for the systematic publication of the “fiscal balances” several times.

The Spanish Government is investing 2,000 million euros less than what it should according to current binding legislation, stated the President of the Barcelona Chamber of Commerce. The investment in Catalonia stands at 16.8% of the investment for the whole of Spain. 18.6% is the minimum investment fixed in the Catalan Statute of Autonomy, which has also been approved by the Spanish Parliament and is thus a binding law.

The budget foresees 3,134 million euros for infrastructures in Catalonia, 18.6% of the quantity for all of Spain, an amount significantly less than in 2010. One of the reasons is a reduction in public expenditure due to the economic crisis and austerity needs. 320 million have not been assigned to any concrete work and their assignation will have to be decided on in a bilateral commission.

According to date from the General Workers’ Union, Catalonia invested only 3.6% of its GDP to education in 2007, putting the territory behind less developed countries such as Romania and Bulgaria. Also, the number of Catalan students dropping out of university is double than the EU average.

Arguing budgetary reasons, the Spanish Ministry of Public Works has decided to delay the arrival of the railroad to the T1 Terminal by an entire year. It was announced today that Catalonia has become the Autonomous Community most affected by budget cuts.