centralism

The conservative Spanish nationalist People’s Party (PP), which runs the Spanish Government, has appealed against the Catalan Executive’s 2015 budget bill, which will delay its definitive approval and implementation by up to one month. The new budget was supposed to be approved this week by the Catalan Parliament, after months of negotiations between the governing centre-right pro-Catalan State coalition CiU and the left-wing Catalan independence party ERC. The new bill will increase social spending and also increase funds for Catalonia’s own tax administration and for the launch of a Catalan Social Security agency. The Catalan Government accused the PP of “parliamentary filibusterism” and warned them that the appeal “will not stop the [self-determination] process” nor the creation of “state structures”. However, it will damage families in need, as it will delay the implementation of new social programmes.

The Catalan Parliament delivered a petition to the Constitutional Court in order to defend the Catalan law on opening hours for shops, which is more restrictive than the Spanish one. Catalonia is trying to preserve its small urban shops model, where most of the shops are run by families. The Spanish Government passed a reform in 2012 forcing Catalonia to allow longer opening hours. In 2013, the Catalan Executive promoted a new bill to invalidate the Spanish one. The new law was approved with 80% support in the Catalan Parliament in January 2014, but the Spanish Government appealed against it a few months later, and the Constitutional Court suspended the Catalan text in late 2014. 

The governing centre-right pro-Catalan State coalition CiU and the left-wing Catalan independence party ERC have reached an agreement to approve the Catalan Government’s budget for the current year. After the President of the Catalan Government and CiU leader, Artur Mas, and the ERC’s President, Oriol Junqueras, reached an agreement on holding early elections on 27 September as a plebiscite on Catalonia’s independence, both parties reopened the budget talks. After 10 days of negotiations, they have reached a definitive agreement, which includes a €100 million fund that will bring more resources for social programmes. They have also agreed to stop paying some allowances to senior officials. Furthermore, they will add €10 million to the development of Catalonia’s own tax administration and they will also create the Agency of Social Protection, which is to manage Catalonia’s Social Security system.

The Constitutional Court has accepted to debate the Spanish Government's last appeal against the Catalan Executive's tax on bank deposits, which has to be paid by financial entities. Such a decision represents the automatic cancellation of the tax for an initial period of 5 months. Catalonia approved such a measure in December 2012 and two weeks later, the Spanish Government approved its own tax with a 0% rate, so it was 'de facto' cancelling the regional taxes. However, instead of compensating Catalonia for having cancelled the tax – as it is legally obliged to do – the Spanish Government refused to do so, since it argued that the tax had not entered into force yet and took the issue to the Constitutional Court. The Court initially accepted the Spanish Executive's appeal and the tax was temporarily suspended, but in May 2013 it was lifted. In July 2014, the Spanish Government modified the tax with a 0.03% rate and in December it presented a new appeal against the Catalan tax, which brought in some €680 million in 2014.

The Catalan Government is expecting to post a 2.2% deficit for the whole of 2014, corresponding to some €4.41 billion. However, the definitive figure will not be known until March. This is more than  double the 1% deficit target that the Spanish Government unilaterally imposed on the Catalan Executive. Over the last few years, the two governments have quarrelled about deficit targets, since the Spanish Executive is imposing much stricter objectives on the Autonomous Communities than those it allows itself, despite regional governments exclusively managing and funding the basic Welfare State services such as healthcare and education. For instance, for 2014, the Spanish Government only allowed the Autonomous Communities to only have 15% of the whole deficit allowed by the European Union to Spain’s entire public sector, despite managing some 35% of the country’s public funds and basic services.

The Catalan Government has formally requested €9.46 billion in loans from the Liquidity Fund for the Autonomous Communities (FLA), run by the Spanish Finance Ministry, to face debt payments and other obligations during 2015. This is the only way that the Spanish Government authorises the Catalan Executive to request liquidity as it has banned Catalonia’s access to financial markets to obtain additional funds, as many governments do when they issue bonds or ask for loans. Therefore, the FLA has become the Catalan Executive’s only bank and a source of funds that must be returned. However, for the first time this year, the Spanish Government will not make money on the FLA and has set a 0% interest rate, which will have a €300 million positive impact on the Catalan Executive’s budget.

The Spanish Deputy Prime Minister, Soraya Sáenz de Santamaría, strongly criticised the calling of early elections in Catalonia, announced by the President of the Catalan Government, Artur Mas, for 27 September as a ‘de facto’ plebiscite on independence. Sáenz de Santamaría stated that such a call shows Mas’ “failure” and his “incapacity” to run a government. She also said that the Catalan President is announcing elections 8 months in advance “to hide his ineffectiveness”. Besides this, the Spanish Deputy PM warned Catalan authorities that any measures adopted in the coming months that exceed Catalonia’s self-rule powers will be taken to the Constitutional Court. 

The President of the Catalan Government, Artur Mas, insisted on Friday that “a clear absolute majority” will be needed for the pro-independence parties in the early elections scheduled for 27 September to make the world understand that the creation of a new independent state must be negotiated. In a radio interview, Mas explained that the road map towards independence - if there is an electoral majority - is still being negotiated among the different parties and organisations, in order to run separately but with a shared road map in case of victory. This road map would include demanding the start of immediate negotiations with the Spanish Authorities to reach an agreement on Catalonia’s independence from Spain if a majority of citizens vote for this scenario on the 27^th of September. 

The Spanish Prime Minister, Mariano Rajoy, who is also leader of the conservative and Spanish nationalist People’s Party (PP), strongly criticised the announcement of early elections made by the Catalan President, Artur Mas, the evening before. Mas announced elections in Catalonia for 27 September this year, transformed into a ‘de facto’ referendum on independence. These elections are the only way Catalans can vote on this issue, taking into account the Spanish Government’s total opposition to even talking about self-determination demands, which were backed by an absolute majority of citizens in the last Catalan elections (held in November 2012) which themselves were already a plebiscite on having a legal vote on independence. However, as opposed to the British Government, Rajoy refused to even discuss these demands, has not made any concessions, and has showed total opposition, which has even involved the criminal prosecution of the Catalan President.

The President of the Catalan Government, Artur Mas, has announced early elections to be held on the 27^th of September this year, which will become a ‘de facto’ referendum on independence from Spain. Before then, the Catalan Government and Parliament will continue to develop some basic state structures, such as Catalonia’s own tax administration and Social Security system. The governing centre-right pro-Catalan State coalition CiU and the opposition left-wing pro-independence party ERC have now “rebuilt” their parliamentary stability pact for the current term after weeks of public disagreements and confusion over the next steps of the self-determination process. After a long meeting on Wednesday evening between Mas, the ERC’s President Oriol Junqueras and representatives from the main civil society organisations supporting independence, they have also agreed on running separately but sharing the same road map to build an independent state from the day after the elections, if a majority of Catalans vote for this option. 

Catalonia’s Supreme Court (TSJC) has stated that there are “signs” that the President of the Catalan Government, Artur Mas; the Vice President, Joana Ortega; and the Education Minister, Irene Rigau, “did not obey” the Constitutional Court’s ban on the symbolic independence vote, which took place on 9 November. On Thursday, 3 weeks after it accepted all the criminal complaints filed against Mas, Ortega and Rigau for having authorised and co-organised the non-binding vote, the TSJC issued the notifications justifying its decision. The Court considers there to be evidence suggesting they may have committed disobedience, perversion of the legal process and embezzlement offenses. Therefore, the high judicial body is launching a corresponding investigation, which will focus on the vote’s preparation between the Constitutional Court’s ban and the day of the vote itself.

“Unity gives us strength as a country”, stated Artur Mas, President of the Catalan Government, in the New Year’s official speech, which is broadcast annually on 30 December. Mas emphasised that “the [Spanish] State wants us to be divided”, because this way “we are weaker and more vulnerable”. The Catalan President makes this statement in the middle of the talks he is carrying out with the opposition left-wing independence party ERC in order to decide whether to run together in early elections that should be transformed into a ‘de facto’ independence referendum. However, the left-wing ERC is reluctant to run with Mas and members of the centre-right pro-Catalan State coalition CiU, which he leads. In his address, Mas also spoke in praise of the symbolic independence vote held on 9 November, which was “an exercise of democracy”, which “should call for dialogue and negotiation, instead of criminal prosecutions”.

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 Government is carrying out “increased recentralisation” of powers, according to the President of the Catalan Government, Artur Mas, and that of the Basque Country, Íñigo Urkullu. Catalonia and Euskadi are the main stateless nations within Spain, with most of their citizens calling for greater levels of autonomy or full independence. They are Spain’s main industrial centres and combined they represent 25% of its GDP (€270 billion) and 20.5% of its population (9.7 million people). The President of the Generalitat and the Basque Lehendakari met on Sunday in Vitoria and agreed on “working together” to face the centralist and homogenising policies of the Spanish Prime Minister, Mariano Rajoy. In addition, they will also work to defend their nations’ right to self-determination.

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.