budget

Catalan Vice President and Catalan Minister for Economy and Tax Office, Oriol Junqueras “totally” rejected the idea that Catalonia will face new elections if pro-independence radical left CUP reject the draft budget for 2016 presented by the Government. In an interview with Catalunya Radio, he urged pro-independence cross-party list ‘Junts Pel Sí’ and CUP to “make the most of the 72 seats majority in the Parliament” rather than thinking about potential new elections. Junqueras also refused to start negotiating with other groups in the Catalan Chamber if CUP keeps up their veto on the bill, as it would mean “renouncing the pro-independence roadmap”.

The draft budget for 2016 presented by Catalan Vice President and Catalan Minister for Economy and Tax Office, Oriol Junqueras, doesn’t have enough support to be passed by the Parliament. Although Junqueras described the budget as “realistic”and “socially committed”, pro-independence radical left CUP considered it insufficient and still too “autonomic”, and claimed that the draft didn’t “reflect the pro-independence declaration proposal”approved by the Catalan Chamber on the 9^th of November. Thus, CUP presented their veto and urged the Catalan Government to present a new draft which would include the anti-capitalists’ proposals, such as disobeying the deficit target imposed by the Spanish executive and carrying out a deeper reform of the tax system. Catalan President, Carles Puigdemont, warned that in order to “complete the task”and put Catalonia “at the gates of independence”the Parliament should at least be allowed to process the budget. This Friday, Puigdemont accused CUP of being “destroyers”if they continue to be carried along by “ideological prejudices”and maintain their veto on the bill.

Catalan President, Carles Puigdemont together with Catalan Vice President and Minister for Economy, Oriol Junqueras met this Wednesday with radical left pro-independence CUP MPs, Anna Gabriel and Joan Garriga in order to discuss their differences over the draft budget presented by the Catalan Government. Puigdemont and Junqueras refused to go back on the budget proposal for 2016 despite CUP’s veto. “If we want to complete our task, the Parliament has to process the budget”, stated Puigdemont during the plenary session this morning. He insisted that it is necessary to agree on the numbers in order to move forward. On the other hand, the anti-capitalists reaffirmed their position and insisted on their veto. The CUP MPs warned during their meeting with the Catalan Government that “it would be nonsense to put the draft to vote because it won’t go any forward” and emphasised that the present proposal leaves “no room for negotiation”.

There won’t be any agreement on the draft budget for 2016 unless the Catalan Government presents a new proposal including radical left CUP’s “proposals, demands and points of view”. This is what CUP MP, Eulàlia Reguant stated this Tuesday after registering theamendment to the entire budget proposal that the Catalan Vice President and Minister of Economy, Oriol Junqueras, presented last week. One of the anti-capitalists’ demands is to disobey the Spanish Government deficit targets and promote “more ambitious” tax reforms. On the other hand, the Catalan Secretary for Economy, Pere Aragonès warned that it’s “necessary” to pass the budget in order to put Catalonia “at the gates of independence”.

The radical left CUP has decided to table an amendment to the entire draft budget that the Catalan Vice President and Minister of Economy, Oriol Junqueras, presented on Tuesday. Junqueras, however, said there is still time for “dialogue and negotiations” and told journalists that he hopes the new budget will be passed in Parliament and that there will be no need to extend the last one. The CUP, which has an agreement of parliamentary stability with Junts pel Sí, justified its veto on the budget saying that the proposal doesn’t reverse “privatisations and cuts” nor show “a clear and frontal disobedience” to the Spanish Government and the financial markets.

The Catalan Government’s total projected spending for 2016 amounts to €23.7 billion, 1.5% higher than last year’s bill and sets a deficit equivalent to 0.7% of Catalonia’s GDP, the same as that for 2015. Catalan Vice President and Minister for Economy Oriol Junqueras handed the proposal this Tuesday to the Parliament’s President, Carme Forcadell.According to Junqueras, the 2016 budget is “the most realistic and social-oriented budget ever”. After presenting the draft, Junqueras met with representatives of all the groups in the Parliament except for pro-independence radical left CUP. The anti-capitalist group, who have a ‘stability agreement’ with the governing party, declined the invitation in protest against the police baton charge that occurred this past Monday in Barcelona’s Gracia neighbourhood after the eviction of a social centre.

The Catalan Government’s budget for 2016 has been drafted and €700 million more is to be allocated to social spending compared to the budget of 2015, according to the Catalan Vice President and Minister for Economy Oriol Junqueras. He also stated that the Health sector will see an increase of €317 million, while the Education budget will increase by €211 million and that of Social Services will grow by €173 million. An additional 50 million more euros are to be allocated to the sectors of Universities and Research, stated the Catalan Vice President. The budget will be increased for the first time in many years, with the goal of being “realistic” and avoid “generating expectations that cannot be satisfied”. The budget will be delivered this Tuesday to Parliament’s President Carme Forcadell and opened for discussion amongst the groups in the Catalan Chamber.

The main Catalan trade association for small and medium-sized companies, Pimec, has repeatedly shown its support for Catalonia’s right to decide its political future. However, in an interview with CNA this Thursday, Pimec’s president Josep González called for the Government to keep the pro-independence process “within the law”. “Let’s do things, but let’s do them right and with common sense”, he stated. González also urged the new executive to approve a new budget as soon as possible and fight against unemployment. The association head went on to celebrate the election of the new Catalan Minister for Business and Knowledge, Jordi Baiget, and defined him as “prudent, open-minded and educated”.

The proportion of investment earmarked for Catalonia in next year’s Spanish budget will be 10.7% of the total, a figure that the Catalan government spokeswoman, Neus Munté, considers totally insufficient. “It is far from the 19.8% Catalan contribution to the Spanish GDP or from the 16% that citizens living in Catalonia represent”, she said on Tuesday after the Spanish government defended the figures in the Spanish Parliament in Madrid. Munté regretted that cultural investment in Catalonia will plummet: the Spanish government will spend three times more money on three museums in Madrid than on all the museums of Catalonia. According to the Spanish Minister of the Treasury, Cristóbal Montoro, the budget is “what Spain, its economy and its citizens need”.

The President of the Catalan Government, Artur Mas, has stated that the independence process will be officially launched if pro-independence parties obtain an absolute majority of the MPs elected in the forthcoming Catalan Parliament elections, to be transformed into a ‘de facto’ plebiscite on independence from Spain. Mas emphasised that during the last 3 years, Catalan parties have been trying to organise a legal and mutually-agreed vote but that the Spanish Government has not wanted to talk even about it, despite more than 1.5 million citizens demonstrating each year on the streets and the results of the previous Catalan elections of November 2012. However, Mas stated he would still “exchange the forthcoming elections for a mutually-agreed referendum”, but highlighted that the Spanish Government has only left the transformation of regular elections into a plebiscite for Catalans to freely and democratically vote on their future as a country, an option that Mas already identified as the last resort in 2013. Therefore, according to him, “in elections, MPs are counted”, “if we were having a referendum we would be counting votes, but this is not the case”, he stressed.

The Spanish Government has presented its budget for 2016 and once again its investment in Catalonia is very far from being in line with the Autonomous Community’s GDP or population share within Spain. According to the planned budget for next year presented this Tuesday (many months in advance for electoral reasons), the Spanish Government plans to allocate only 10.7% of its territorial investment to Catalonia, even though the Catalan economy represents 19% of Spain’s overall GDP and Catalans make up 16% of Spain’s population. The amount planned for 2016 is however a bit higher than that allocated for 2015, which was only 9.5% of Spain’s total, the lowest in many years and widely interpreted to have been in retaliation for independence claims. The amount for 2015 was €1,072.3 million and that for 2016 is €1,179.5 million, which means a 10% increase (+€107 million) but is still one of the lowest investments in decades, both in percentage and absolute terms. Nevertheless, the Madrid-based media has focused on this increase, presenting Catalonia as a clear winner and forgetting about the extremely low investment levels from 2015 and 2016.

Despite the fact that all the Autonomous Community governments that are not run by the People's Party (PP) requested the Spanish Executive  – run by the PP – to allow them a greater deficit in 2016 and that Spain's independent fiscal authority Airef also recommended granting regional governments greater deficit targets for next year, the Spanish Finance Minister, Cristóbal Montoro, has rejected doing so. In 2016, the Autonomous Communities will have to close their budgets with less than a 0.3% deficit, "an absurd" and "unrealistic" figure according to the Catalan Finance Minister, Andreu Mas-Colell, who was recently awarded an honorary PhD in Economics by the University of Chicago. The Catalan Government asked for a 0.88% deficit target for 2016. Besides this, next year the Catalan Executive will receive €1.2 billion that should have already been transferred by the Spanish Executive but was not, due to Montoro's tax revenue miscalculations. In addition to this, since economic activity is growing, the Spanish Government will increase the Catalan Executive's funds by €700 million each year from 2016 onwards.

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.

Pablo Iglesias, Secretary General of the Spanish alternative left party Podemos, has committed himself in Barcelona to respecting “the democratic will expressed by Catalans” regarding a self-determination vote, although he did not mention independence. Iglesias made this statement during the presentation of the electoral coalitions built for both the Catalan and Spanish elections with the Catalan Eco-Socialist and Post-Communist coalition ICV-EUiA, which were announced a few days ago. The leader of Podemos recognised that “the way [such an expression] will be legally materialised will present difficulties”, but that his party is “committed to implementing the most operative and effective ways so that such difficulties can be removed”. Meanwhile, ICV’s National Coordinator, Joan Herrera, said that “in order to change Catalonia, we have to change the entire [Spanish] State”. Furthermore, he said that their coalition MPs elected in Catalonia will form their own group in the Spanish Parliament.

The Catalan Government has sent another warning message about its lack of liquidity, which depends on the Spanish Executive’s regular transfers since most taxes are collected by Madrid-based services. The Catalan Minister for the Presidency, Francesc Homs, accused the Spanish Government of "deliberate asphyxia" and asked the rest of the Catalan parties to "pool together" to denounce the situation. According to Homs, such financial asphyxia will affect everything except salaries. All Catalan Government departments will be affected and their payments to service providers will be delayed. The Catalan Finance Minister, Andreu Mas-Colell, already warned about this financial asphyxia on previous occasions. In the coming days, Mas-Colell will meet with the rest of the parties to discuss the situation. However, the Spanish Finance Ministry rejects the accusation and has stated that it has made all the pending transfers.