competitiveness

After an 8.3% drop in car sales in 2012, SEAT announced it would lay off 400 temporary workers and it would reduce administration and commercial costs, to the equivalent of 340 additional jobs. Finally, after three days of negotiation, the car company and the workers’ representatives have signed an agreement by which the workers will lose part of the extra hours accumulated but there will not be additional layoffs or a salary reduction. However, the 400 temporary workers will be made redundant and will have to leave the company. Additionally, the Spanish Government has announced that it will double the public budget to stimulate car purchases.

Compared to the rest of industrialised countries, Catalonia’s industrial sector improved its competitiveness index by 0.7% between October and December 2011, compared to the same period a year earlier. Catalan industrial prices have been improving their competitiveness since 2009.

In an interview with the Catalan Public Television Broadcaster, the Catalan President and leader of the Centre-Right Catalan Nationalist Coalition (CiU) recognised that the Spanish Government could intervene the Catalan Government. “It could happen, I won't deny it”, he said. Furthermore, he warned that “the mistrust level will be very high” if the Spanish Government does not pay the money it owes the Catalan Executive. Mas said that “if Madrid wants to intervene Catalonia’s self-government”, he would call early elections. In addition, he said that further budget cuts will be needed.

The Spanish Government stressed that no Autonomous Government will be left disappointed if they have a “responsible” attitude and have an austerity plan in place. However, those failing these measures could be intervened the same way “the European Union” has done with countries such as Greece and Ireland, but without “having their powers taken away”, clarified the Spanish Finance Minister, Cristóbal Montoro. The Autonomous Community governments have renewed their 1.3% deficit objective for 2012 and the Spanish Government has offered additional tools to raise funds and solve liquidity issues. The Catalan Finance Minister, Andreu Mas-Colell, has met bilaterally with Montoro to foster cooperation and discuss the Catalan Government’s claims about the €2.2 billion the Spanish Government owes Catalonia.

The Spanish Government refuses to transfer some of the funds that it is legally obliged to pay Catalonia in 2011. Without this money, the Catalan Government will have difficulties meeting the deficit objective for this year. The Catalan Minister for Finance, Andreu Mas-Colell, considers the stance of the Zapatero Government to be “rude” and ignorant to the needs of Catalonia. Furthermore it forces the finances of Catalonia to be put in the spotlight. Every single Catalan political group, including the Socialists and the People’s Party, have criticised the decision of the soon to be former Spanish Prime Minister, and have expressed their support for Mas-Colell.

The Catalan Government will be able to keep the number of new teacher positions this year, after the Spanish Government withdrew its complaint. However, the Spokesperson for the Catalan Government insisted that the Spanish Executive continues with “its offensive against Catalonia”, as among other issues it still refuses to pay 1.45 billion euros from the Competitiveness Fund. In addition, only 0.8% of the Spanish Government’s approved public works in 2011 are in Catalonia.

The Spanish Government risked losing an important vote at the Parliament if members of the Catalan Socialists had voted the same they did in the Senate. However, they voted together with the Spanish Socialist Party (PSOE). By obliging the PSC to choose between its vote coherence and its loyalty to the PSOE, the Centre-Right Catalan Nationalist Coalition CiU dislocated the PSC in the middle of the municipal election campaign. The rejected motion had asked the Spanish Government to reconsider its stance and pay the Competitiveness Fund’s 1.45 billion euros in 2011.

The professor of business direction and administration for IESE, Pedro Nueno, assures that conversations between the Catalan Government and the Chinese auto manufacturer Chery are “fully underway”.