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Catalonia has not asked for a rescue from Spain, said the spokesman of the Catalan government, Francesc Homs. At a press conference, Homs denied reports that Catalonia is seeking a full bail-out, but admitted the government is considering participating in the Regional Liquidity Fund. “This is a treasury mechanism”, said Homs, who added that by using the fund Catalonia would not have to meet “any new set of conditions”. When presenting the €18bn fund last week, the Spanish government said the aid will be only offered under “strict conditionality”.

The Spanish Economy minister said on Monday that the state will “absolutely not” require a full rescue package such as the one taken by Greece, Ireland or Portugal. Speaking at a parliamentary hearing, De Guindos said that the Spanish economy is competitive and has “capacity to grow” unlike other struggling European countries. However, markets seem unconvinced by Luis de Guindo’s remarks, pushing the ten-year Spanish bond yields to more than 7.5%. Doubts about the autonomous communities financing capacity are also affecting the situation, especially after Valencia announced that it will ask for about 3,500 million euros from the Spanish Liquidity Fund. Catalonia, the most indebted community in Spain, is still considering whether to use the money from the fund, and will only decide after studying “the set of conditions” attached to it.

The Catalan President in a parliamentary session criticised what he considers to be “acts of disloyalty” by the Spanish government. He said it is unfair that regions have to assume most of the burden of Mariano Rajoy’s adjustment program and emphasised the fact that Madrid has yet to pay much of its debts to Catalonia. Mas accused Rajoy of “lacking respect” for the autonomous regions and said this could lead to a “break down of relations” between administrations.

The Catalan minister for the Economy, Andreu Mas-Colell, said in an interview that he will ask to speak directly to Brussels if Madrid decides to intervene in Catalonia’s finances. The minister is very disappointed with the results of a meeting between the 17 autonomous communities and the Spanish Minister Cristóbal Montoro. At the summit, Montoro announced a new cut in the regional deficit targets, from 1,1% to 0,5% for 2013 and from 1% to only 0,1% the year after. This could imply a new adjustment of about €650 million on top of the 1,500 million already announced by Catalan President Artur Mas only two months ago. The Catalan government spokesman, Francesc Homs, did not deny the possibility of new cuts in Catalonia in the near future. If they are confirmed, those would be the fourth round of spending cuts implemented in the country since Mas entered office in November 2010. Meanwhile, other autonomous communities still have to start to reduce spending.

President Artur Mas says Catalonia needs to come out of the crisis stronger and citizens should “come together” in the wake of new austerity measures announced this Wednesday by Spanish president Mariano Rajoy. The Catalan government spokesman, Francesc Homs, celebrated Rajoy’s decision to cut Spanish public workers salaries, several months after the same decision was implemented in Catalonia. However, he criticised the VAT rise. The Catalan minister for the Economy, Andreu Mas-Colell, said Madrid’s plan is “in line” with EU instructions but urged Rajoy to offer “some kind of compensation” to the autonomous communities because their expenditure won’t benefit from the VAT rise.

The Catalan President has made the case for Catalan full fiscal autonomy in a trip to Portugal. Artur Mas has started an international tour to try to explain to foreign leaders why Catalonia wants to have a new fiscal arrangement with Spain. According to the president, the Catalan fiscal deficit caused by the current system is damaging Catalonia, one of the driving forces of the Spanish economy, and therefore is also detrimental to Spain.

The ruling Centre-Right Catalan Nationalist Coalition, Convergència i Unió (CiU) and the People’s Party (PP) have agreed to evaluate the drug prescription fee in 2013. The implementation in 2013 of the 1 euro fee will be on the condition of meeting the deficit targets and the effects of other financial measures regarding medicines. The PP has abstained in the Catalan Parliament’s vote and the plan finally has the green light to be implemented.

The President of the Catalan Government, Artur Mas, travelled to Massachusetts and New York to promote Catalan businesses and present Catalonia as one of the main biotechnological clusters and tourist destinations in Europe. In addition, Ernst & Young presented their report on life sciences companies and research centres in Catalonia, which indicates that almost 30% of this sector’s turnover in Spain comes from Catalan businesses.

The Catalan Government’s debt represents 21% of Catalonia’s GDP, and it is in charge of almost half of public spending and manages healthcare, education and other basic services. Catalonia’s debt continues to increase because of the public deficit, but slows down its growth significantly. Over the first quarter of 2012, the Catalan Government’s debt increased by €222 million, while it had grown by €2.34 billion over the same period in 2011. With this last increase, the Catalan Government’s debt reached €42 billion at the end of March 2012.

The President of the Catalan Government has organised a summit with all the parties at the Catalan Parliament to discuss a new fiscal scheme for Catalonia. According to official studies, Catalonia gives 8.5% of its GDP each year to pay for investments and services in the rest of Spain, an amount that represents more than €17 billion per year. Some parties state that the current model is unsustainable for Catalonia and represents a plundering of its finances. Others have a more moderate opinion. Nonetheless, all political parties in Catalonia now believe that this amount is excessive and that the fiscal scheme between Catalonia and the rest of Spain should be reviewed. However, they significantly disagree on the formula and the timing.

The Catalan Government will adjust its budget by €4.295 billion in 2012, through spend cuts of €2.680 billion and increasing revenue by €1.615 billion. With this plan, the Catalan Government will meet the 1.5% deficit target. The Council of Fiscal and Financial Policy (CPFF), which brings together the Spanish Government and the 17 Autonomies, has approved Catalonia’s budget adjustment plan for 2012-2014. The Spanish Government would pay part of the money owed, but not all of it. The Catalan Government has included a plan B in case the Spanish Government does not honour its fiscal obligations towards Catalonia.

The third plan represents an additional budget cut of €1.5 billion, in order to meet the 1.5% deficit target for this year. The President of the Catalan Government, Artur Mas, said that the plan “guarantees essential services”. He also stated that if the Spanish Government had paid what it owed last year, the current reduction would be halved. The plan decreases budget allocations for public companies, reduces public employee salaries once again, decreases the amount allocated for subsidies, delays investments, privatises some public companies, sells public buildings, and implements the measures decided by the Spanish Government regarding health and education. The opposition criticised the plan for not being concrete and effective enough.

Coinciding with the European Central Bank Governing Council organised in Barcelona, the President of the Catalan Government, Artur Mas, met with Mario Draghi and other members of the ECB Governing Council. Mas took the opportunity to explain to the ECB the Catalan Government’s austerity measures and its efforts to reduce Catalonia’s public deficit. He also spoke of his party’s support to all the reforms taken at Spanish level, despite being unpopular. However, Mas warned the ECB President that reducing the deficit too fast in the middle of an economic recession might worsen the crisis.

The Russian company Lukoil has reached an agreement with the Catalan company Meroil to build 13 new oil tanks at Barcelona Port, which are able to store 360,000 cubic metres. Furthermore, Barcelona Port is the only Mediterranean port ready to host the largest and deepest oil tankers. The Catalan President, Artur Mas, unveiled the infrastructure and emphasised Catalonia is strengthening its position as “Europe’s gateway for goods coming from Asia and North Africa”. He also noted Catalonia’s attractive position for foreign investment. Barcelona Port is linked by international width standard railway with Central Europe and has the Zona Franca logistics and industrial district next to it.

The Dutch newspaper NRC Handelsblad has published an interview with the President of the Catalan Government, Artur Mas. Mas states that “Catalonia’s intervention by Spain would be unthinkable” and “unfair, as no government has done as much as Catalonia's to adjust the economic situation”. Furthermore, he adds that “people’s reaction [against such an intervention] would be very strong”. NRC explains the austerity measures implemented by the Catalan Government to reduce its deficit, such as the drug prescription fee or public employee salary reduction. Furthermore, Mas complained that Spain’s Autonomies model has “decentralised spending but not revenue”; “we want to collect our taxes”, he affirmed, being another “state within a federal Europe”, contributing to regional solidarity.