catalan government

This Thursday, Catalan President, Artur Mas, said he would call a “plebiscite” style election in 2016 if the Spanish government does not allow Catalonia to carry out a referendum on independence next year. In an interview with Catalan radio, Mas rejected calling early elections even if Madrid refuses his proposal for a referendum. Instead, he would ask Catalans to vote in the 2016 election considering which parties are in favour or against independence, thus showing the overall support for the creation of a new Catalan state.

The Catalan Government is drawing out plans to prepare a referendum on independence, especially considering the posibility that the Spanish government may refuse to collaborate with Catalonia in the organisation of the vote. The Catalan Vice President, Joana Ortega, will meet next week with the Unity for Electoral Process to discuss the logistics of the referendum. In an interview on Friday with the Catalan radio, she said the next budget will include a special line for the costs of running the independence vote.

This coming 11^th of September – which is Catalonia’s National Day – pro-independence supporters have organised a gigantic human chain called the ‘Catalan Way Towards Independence’ that will cross Catalonia from North to South stretching 400 km and passing through some of the main cities, such as Barcelona, Girona and Tarragona. After having organised the 1.5 million-strong demonstration of 2012, the civil society platform Catalan National Assembly is preparing a new massive demonstration that calls for independence from Spain. This year’s peculiar demonstration is inspired by the ‘Baltic Way’ of 1989, which gathered 2 million people forming a 670 km-long human chain crossing Estonia, Latvia and Lithuania. The ‘Baltic Way’ was organised exactly 24 years ago and issued a manifesto that read “a common European home can only by set up if all European nations are granted a free right to self-determination”.

Catalonia’s main SME association PIMEC and the Catalan Business Circle (CCN) have criticised the regional Government of Madrid for issuing a report not sufficiently backed-up by economic data. In addition, they have accused Madrid’s Finance Minister, who presented the report, of offering a politically-biased version by saying that companies have left Catalonia due to the self-determination debate. PIMEC and CCN stated they do not have data supporting Madrid’s statement. On the contrary, they have data proving that foreign investment has not reduced. In addition, CCN accused the Spanish Government of building a “Greater Madrid” as an economic centre, at the expense of other areas such as Catalonia. PIMEC emphasised the Catalan industrial tradition and the vigour of its economy, although admitted that taxation is higher in Catalonia than in Madrid.

In the last three years, 1,060 companies have moved their headquarters from Catalonia to the region of Madrid, according to a report published by Madrid’s regional Government. The report states that most of them took the decision because of the lower taxes that exist in Spain’s capital, compared to other areas such as Catalonia. Since 2010, 5,000 companies based in the rest of Spain decided to move to Madrid; 21.4% of them were from Catalonia. Paradoxically, 43 cents out of every euro paid in taxes in Catalonia is to pay for investments and services made in other parts of Spain, which turns into an annual fiscal deficit of 8.5% of Catalonia’s GDP, meaning that Catalans are obliged by the Spanish Government to give away €16.5 billion. Meanwhile, the Catalan Government is under-budgeted and obliged to implement severe budget cuts and raise taxes to balance the budget.

The number of public employees in Catalonia has been reduced by 4.76% over the last year, while in the whole of Spain the reduction was of 3.97%, due to the budget cuts in the public sector. However, the number of civil servants in Catalonia was already significantly lower than the Spanish average, according to a study issued by the SME association PIMEC. In January 2013, there were 40.7 civil servants for every 1,000 inhabitants in Catalonia, while the Spanish average was 57.4 and it reached 79.6 in the Autonomous Community of Extremadura. In fact, 26.7% of the Extremadura’s workforce is employed in the public sector, while the percentage drops to 11.1% in Catalonia. PIMEC stated in its report that, if Catalonia had the same proportion of public employees as the Spanish average, its unemployment rate would drop from 24.5% to 20.5%, with 150,000 fewer jobseekers.

Since 1986, the Catalan Government has its own lottery system, which brought a profit of €40 million last year. The Catalan lottery administration dedicates 60% of the revenue to prizes and the remaining 40% to finance public policies. In total, there are six lottery games, including scratch cards and lotto draws, but there are no specific draws for special days, as exists in the Spanish Government’s Christmas Lottery. After a proposal from representatives of shopkeepers’ associations, the Catalan Executive decided to launch a similar Christmas draw, with tickets worth 5 euros. 80% of the revenue will go towards prizes and 20% will finance children’s assistance programmes. €15 million will be put on sale. The opposition has been surprised by the initiative and stated they were hoping it was not the only measure to increase revenue.

According to data released by the Catalan Finance Ministry, the Catalan economy has stopped the fall in GDP during the second quarter of 2013, since it remained at the same rate of the previous quarter. There has been a slow strengthening of the Catalan economy over the last few months: the fourth quarter of 2012 saw a reduction of 0.7%, the first quarter of 2013 GDP only shrunk by 0.1% and during the second quarter it remained stable at 0% growth. The improvement has been due to the industrial sector, particularly thanks to the exportation of goods which made up for the sustained falling of domestic demand. However, compared to the same figures for last year, the Catalan economy decreased by 1.3%.

The President of the Catalan Government, Artur Mas, officially announced on Tuesday that last year’s budget will be extended for the whole of 2013, since the 1.58% deficit target imposed by the Spanish Executive is too low and arrives too late. However, he explained that the budget extension guidelines will meet the 1.58% deficit target, because otherwise they would not have the money to pay for the additional spending. Furthermore, Mas announced they will take the “unfair and illegal split” of the deficit targets among the different government levels to court, since they consider the Spanish Government has not done it “in a proportional way”, since it keeps most of the deficit allowed for Spain’s total public sector for itself. Some opposition parties have strongly criticised the Catalan Government for extending the budget.

The Catalan Ombudsman, Rafael Ribó, announced on Monday that 4% of children under the age of 16 suffer from food deprivation. Almost 50,000 children are not eating meat or fish at least once every two days, meaning they do not have a sufficient intake of protein. However, Ribó rejected there was a structural problem of malnutrition and linked the phenomenon to the economic crisis’ effects. Ribó asked the Catalan Government to act immediately to ensure that all children have access to enough food. The Ombudsman proposed 33 recommendations to reduce the child poverty rate, which currently stands at 28%, with approximately 345,000 children under the age of 16 living in poverty. The rate of extreme poverty has also increased in recent years and affects a tenth of Catalan children (130,000).

Container exports from the Port of Barcelona reached 276,566 TEU’s for the first half of this year, an increase of 12% on the same period of 2012. North Africa and the Far East have significantly grown as the destinations of exports from the Catalan harbour. Furthermore, among the highest exports are motor vehicles and bulk solid cargo such as cement. The Catalan Minister of Planning and Sustainability, Santi Vila, stressed the importance of the Port as an economic engine and the fact that it has changed itself from being an importer to an exporter of goods in recent years.

By the end of July there were 6,859 fewer people registered at the Catalan Public Employment Service (SOC) than a month ago, which leaves the total number of registered unemployed individuals at 610,429. The current amount of jobseekers is now the same level as September 2011. Unemployment levels have been decreasing in Catalonia for the last five consecutive months. In addition, last July’s drop is the most significant reduction in this month of the year since 2010. In the whole of Spain, the unemployment rate decreased by 1.36%, with 64,866 fewer people registered at the Public Employment Service offices. This means that by the end of July there were 4,698,814 individuals registered as unemployed in Spain. The Catalan Government states that, if the trend is kept during the second semester, the economic crisis would have reached “its lowest level” earlier this year.

“2013 is done. We now need to think about 2014”, summed up the Catalan Finance Minister, Andreu Mas-Colell, after finding out about the 1.58% deficit target imposed yesterday by the Spanish Executive. Mas-Colell considers this target to be “intolerable” since it “asphyxiates” Catalonia. The Catalan Executive was waiting to find out this figure to approve its definitive budget for the current year, but considering the low deficit target it is now considering extending the 2012 budget for the whole of 2013 – as it has been doing so up until now. The Catalan Government will make the final decision on the issue next Tuesday. Furthermore, Mas-Colell warned that a €1.7 billion budget adjustment will be needed in 2014 that will be required to increase one-off revenue since the Catalan Government “cannot spend less than in 2013”.

The Catalan Finance Minister, Andreu Mas-Colell, accuses the Spanish Government of “asphyxiating” the Autonomous Communities. The 1.58% deficit target imposed to the Catalan Government represents €2.6 billion of further budget adjustment compared to last year’s budget, which ended with a 1.96% deficit. Mas-Colell denounced that the Spanish Executive is “keeping for itself the greatest share of the deficit pie”, while it is only responsible for 50% of Spain’s public spending. The Spanish Government is setting itself a deficit target of 5.2% for 2013 and most of the flexibility allowed by the European Union, which authorised a 6.5% deficit for Spain’s total public sector. Meanwhile, the Autonomous Communities have a deficit target 4 times stricter, although they manage 36% of Spain’s total public spending as well as basic services such as healthcare and education.

Artur Mas, the President of the Catalan Government, challenged the opposition parties to present a vote of no-confidence if they want him to step down. Mas, who leads the Centre-Right Catalan Nationalist Coalition (CiU) and the Liberal party CDC, emphasised that CDC has been investigated “until the last millimetre” and the judge has not indicted any party leader or member of the Catalan Executive. He explained that the party’s finance management team and its political leadership have been separated since the late 1990s. The Catalan President insisted he believes in the word given by the party treasurer, who has been indicted by the judge. However, he guaranteed that, if the trial proves that CDC received any illegal money, the party “will return up to the last cent” and will take full responsibility for it. The opposition considered the explanations to be insufficient and demanded resignations if the corruption case is finally proven.