economy

The Catalan Government has presented its budget proposal for 2014, which posts a 1% deficit, representing a 35.5% annual reduction and amounting to €1.98 billion, in line with the 2014 deficit targets imposed by the Spanish Government. The budget prioritises healthcare, education and social policies, which represent 71% of the total non-financial spending. Non-financial spending grows by 0.2% and reaches €20.30 billion, while the total spending amounts to €29.31 billion. The Catalan Finance Minister stressed that spending had not been reduced this year since in the last 3 years it had already dropped by 22%. Budget cuts “have reached their limit”, as otherwise “social cohesion” and “the Welfare State” would “be at risk” he said. In 2014 the Catalan Executive will spend the same per inhabitant as it was doing in 2004 taking into account inflation (€1,901).The adjustment for 2014 focuses on increasing revenue by €3.2 billion, mostly through new taxes (€910 million) and the sales of assets and privatisations (€2.32 billion). On top of this, the Catalan Government forecasts a 0.9% economic growth for 2014, leaving behind the recession of 2012 (-1.2%) and 2013 (-1.1%).

The Catalan Government has forecasted a 0.9% economic growth for 2014 in its budget proposal for next year, leaving behind the recession of 2012 (-1.2%) and 2013 (-1.1%). The positive figures are mostly due to the strength of the export sector – which will continue to improve its results. The main factor slowing down growth will be the internal demand, which will continue to decrease although it will do so at a lower pace. In addition, the Catalan Executive believes the unemployment rate will decrease and reach 23.1% by the end of the year. It is expected 2013 will end with a 23.7% unemployment rate, higher than the 22.6% rate registered at the end of 2012.

However, in annual terms, Catalonia registered a fourth consecutive drop in unemployment figures with a 1.93 % decrease compared to October 2012 and 12,474 fewer jobseekers. By the end of October 2013, 633,832 people were registered as unemployed at the offices of the Catalan Public Employment Service (SOC), meaning a 2.08% increase since the month of September, with 12,921 extra people unemployed. These latest figures, which were released by the Spanish Ministry of Employment and Social Security, also indicate a third consecutive month of growth in unemployment. In the whole of Spain, registered unemployment also increased for the third consecutive month.

According to the Catalan Institute of Statistics (Idescat), Catalonia’s economy grew by 0.1% between July and September. For the first time in 9 quarters, the Catalan economy is growing again, leaving behind the technical recession. However, in annual terms, Catalonia’s GDP has not recovered yet and at the end of September it posted a 0.6% decrease on data from September 2012. Besides, the Spanish Institute of Statistics (INE) confirmed that the Spanish Economy also grew by 0.1% in the third quarter of the year, a figure which had been advanced last week by the Bank of Spain. In annual terms, the Spanish economy dropped by 1.2% compared to data from September 2012.

This October, prices are 0.1% cheaper than they were a year ago, in October 2012, according to the advanced inflation rate released by the Spanish Statistics Institute. If this is confirmed, annual inflation rate would have gone from +0.3% in September to -0.1% in October. Prices of food and non-alcoholic drinks fell and the increase in university education fees was slight. Last year, university tuition fees doubled as one of the austerity measures adopted to reduce public deficit. Regarding monthly changes in the overall inflation rate, prices increased by 0.4% between September and October.

35 companies united with public institutions formed a Boating Industry Cluster to make Barcelona an international leader in the sector. The cluster will help achieve higher levels of productivity and competitiveness. It builds on Barcelona’s deep tradition as a maritime city. In fact, Barcelona hosts the most important trade fair in the boating industry in Europe and it is the world’s 4^th largest port for cruise ships. Furthermore, more than 1,000 companies related to this sector are based in Catalonia, as well as prestigious university schools. This initiative follows Barcelona’s strategy to identify specific business sectors and create clusters to strengthen them, as it has previously done with sectors such as biomedicine, automation and mobile technologies.

International tourism keeps growing in Catalonia. The money that each international visitor spends in Catalonia increased by 4.9% in the first 9 months of 2013 and reached €905 per person on average. Furthermore, between January and September, foreigners visiting Catalonia spent 11.9% more than they did in the same period of 2012. According to data released by the Spanish Ministry of Industry, Energy and Tourism, Catalonia has been the main destination in Spain measured by total spending volume during the first 9 months of the year. It is followed by the Balearic Islands, which registered revenue of €9.59 billion (7.5% more than 2012 figures). Valencia (also called Valencian Country) was the fifth Autonomous Community, with €4.24 billion.

The President of the Catalan Government, Artur Mas is the most senior public figure in Catalonia, just after the King of Spain and the Spanish Prime Minister. However, at Thursday’s scheduled dinner with the main Catalan business association ‘Foment’ and the Spanish Deputy Prime Minister, Soraya Sáenz de Santamaría, a last-minute change in the protocol put Mas in second place. The Catalan President considered that “conditions had changed” and as a protest he announced he was not going to the dinner. Instead, the Catalan Minister for Business and Employment was representing him. ‘Foment’ has been ambivalent regarding Catalonia’s self-determination process, although it supports the claim for finding a negotiated way out of the current political situation by organising a legal referendum.

In an interview with the Catalan News Agency, the European Commissioner for Regional Policy, the Austrian Johannes Hahn, nuanced previous statements made by other Commissioners and opened the door to debating Catalonia’s EU membership “in a more relaxed way”. Hahn “rejected” the idea that the Commission “is ignoring Catalonia’s independence movement”; “we are watching it carefully”, he said. On the question of automatic expulsion from the EU in the event of becoming independent, the Commissioner emphasised that “of course there is no provision in the Treaty and that’s why legal experts have the opinion that then Catalonia should ask for membership”. However he immediately added that “we should resolve this issue in a more relaxed way”, since “if there is independence, it would not happen from one day to the next”.

At Spanish level, unemployment increased both in monthly and annual terms. Catalonia is the Autonomous Community with the largest annual unemployment drop in absolute terms and the second highest in relative terms. The number of people registered as unemployed in Catalonia at the end of September dropped by 11,546 individuals compared to figures from a year ago, representing a 1.83% annual decrease. However, in monthly terms, registered unemployment increased by 1.51%, with 9,243 more jobseekers. September is a month with a traditional unemployment increase due to the end of summer season contracts. Last September’s unemployment increase was the lowest since 2008.

Nils Schmid, Vice President of Baden-Württemberg and regional Minister for Finance and the Economy, said in an exclusive interview with the CNA that Catalans are the ones who have to decide whether they want to remain within Spain or to become independent. This process should “of course […] be based on a referendum”. The Leader of the Social-Democrats (SPD) in this state also added that his party is proposing to include the possibility of holding referendums at national level in Germany, which is currently not envisaged by the German Constitution. However, he “cannot imagine” an independence referendum for Baden-Württemberg. On other issues, Schmid pointed out that “fiscal consolidation is not enough” and has to come with “structural reforms” and policies to stimulate growth. He also welcomed Catalans who are going to Germany to find job opportunities.

In his seventh official visit to the European Union institutions as President of the Catalan Government, Artur Mas, met with three European Commissioners on Monday, including Vice President for Economic Affairs Olli Rehn. Mas acknowledged that they had not asked him about Catalonia’s independence process – an attitude that does not surprise him, he said. Mas explained that neither had he brought it up, since his visit was to discuss specific policies and issues. “If they do not ask me about it [Catalonia’s self-determination process], I do not talk about it”, he said. However, when addressing the press, the Catalan President emphasised that the EU should have “the political honesty to acknowledge there are no precedents” regarding the secession of a part of a Member State, and no path is set in the EU Treaties for this eventuality.

Catalonia has consolidated its position as Spain’s top destination for international tourists, strengthening its leadership during the summer months but also throughout the year. 11.04 million foreigners visited Catalonia between January and August, 26.1% of all the 42.3 million international tourists who visited Spain in that period. The Balearic Islands (19.7%) and the Canary Islands (15.9%) follow Catalonia’s lead. Furthermore, all the historical records at Spanish and Catalan level were broken last August: 8.3 million tourists visited Spain during that month, and 27% of them chose Catalonia as their destination. This represents more than 2.25 million foreigners visiting Catalonia in a single month, a 12.3% increase on data from August 2012. 

The Catalan company has signed an agreement with the Shah Deniz consortium for a 25-year period. The Azerbaijani company will supply 1bcm of natural gas per year. The agreement is conditional on the final decision on the project investment, a step planned for later this year. The development of this project will open a new supply route to Europe through the ‘Southern Corridor’, which will allow Europe to access gas reserves in the Caspian Sea area. Barcelona-based Gas Natural Fenosa will receive the gas in facilities based in Italy, one end of the European gas pipeline passing through Georgia, Turkey, Greece, Albania, and crossing the Adriatic Sea. The Catalan company said that this supply will consolidate its presence and strengthen its gas supply business in Italy.

The President of the Catalan Government, Artur Mas, wanted to clarify some doubts about Catalonia’s EU membership in the event of becoming an independent state, specifically regarding economic issues. The Catalan Government is insisting that the treaties do not say that a separated part would automatically be expelled from the EU and that the issue would require a political negotiation. However, the Catalan President emphasised on Thursday that what is crystal clear is that “whatever Catalonia decides [regarding its independence from Spain], it will have the Euro as its currency”. Mas was answering the international investors behind BCN World, a €4.5 billion leisure resort. On Wednesday they stated that they do not care whether Catalonia remains in Spain or not, but they do care whether it has the euro and remains within the EU internal market.