spanish government

Catalonia already approved its own spending limit through a law of its own last September. The Spanish Vice President, Soraya Sáenz de Santamaría, explained that the new Budget Stability and Sustainability Law will introduce “mechanism corrections” and “almost automatic” sanctions for public administrations that do not meet the deficit objectives. In addition, before approving their budget, the Autonomies and large city town councils will have to commit to a spending limit and present detailed reports on several aspects of the budget. However, she stressed that each autonomous government will have the freedom to allocate resources.

The Spanish Finance Minister, Cristóbal Montoro, announced that the Central Government might heavily fine the governments of Autonomous Communities that do not meet the deficit objective. Montoro, from the People’s Party (PP), met with the regional governments run by his party to prepare a common position on the issue. On the same day, the Centre-Right Catalan Nationalist Coalition (CiU) gave its support to the Spanish’s Government decree to cut public spending and increase taxes, announced at the end of December.

The Spokesperson for the Catalan Government has said that the new Spanish Economy Minister’s proposal goes against the Constitution and Catalonia’s self-governance. The Basque Country is also against the measure announced by Luís de Guindos in an interview with the Financial Times. He said that the crisis “was an opportunity to impose hard conditions and measures” on the Autonomies; he also added that before the Autonomies pass their budget, the Spanish Government will have to approve it. The next day, the Spanish Vice President refused to go into detail on the issue but stated that every administration has to commit to the deficit objective.

Artur Mas, President of the Catalan Government, has reflected on his first year in office. Mas justified the budget cuts his government has made in order to avoid “a collapse” in public services. He also criticised the recent trend of patronising the Autonomous Communities and claiming that they are responsible for Spain’s financial problems. That, he believes, has made them scapegoats. “The Autonomies are a very important part of the State”, “they provide almost all public services to citizens”, he stressed. In addition, Mas insisted that Spain’s debt and deficit is mainly due to the Spanish Government’s overspending over many years and not the fault of the Autonomies or the municipalities.

In a radio interview, Luis de Guindos, said he is supportive of the budget austerity measures put in place by the Catalan Government over the last 12 months. In addition, the new Spanish Minister for the Economy stated that the drug prescription fee proposed by the Catalan Government is Catalonia’s responsibility, contrary to that said by the previous Spanish Government. In addition, the Catalan Health Minister explained that the drug prescription fee would include exceptions “basically” based on personal “economic reasons”.

The winner of the Spanish Elections, Mariano Rajoy, outlined his government programme at the parliamentary debate on his approval before being officially appointed Prime Minister. Rajoy, without revealing any details, talked about redefining public powers, reforming public administrations, homogenising welfare policies and ensuring market unity. The Centre-Right Catalan Nationalist Coalition (CiU), the Catalan Socialist Party (PSC), the Catalan Green Socialist and Communist Coalition (ICV-EUiA) and the Left-Wing Catalan Independence Party (ERC) warned Rajoy of not affecting Catalonia’s self-government with his reforms.

The Catalan Minister for Finance, Andreu Mas-Colell stated in a press conference that because of the Spanish Government’s refusal to pay them the promised €759 million, the Catalan Government will be short of cash for the remainder of the year. Mas-Colell explained that Catalan public employees would receive most of their Christmas bonus with a one week delay. In addition, service providers will also be paid later. Visibly angry and arguing that they had not been previously informed about the measures, union representatives decided to leave the negotiation table with the Catalan Government where talks had been taking place about next year’s salaries, working conditions and staff numbers.

The outgoing Spanish Government has refused to pay Catalonia €759 million this year despite being legally obliged to do so and having stated publicly on several occasions it would pay the money. The Spokesperson for the Catalan Government announced Catalonia is risking to miss the deficit objective for 2011 without the funds. Facing this situation and the damage caused by it, the Catalan Government has decided to take the Spanish State to court and explain the issue to European institutions. Mariano Rajoy, Spain’s future Prime Minister, has said that he is not aware of the issue.

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 has signed an agreement with the main trade unions and business association to foster “negotiated flexibility” within the labour market. The aim is to provide companies with a greater flexibility framework while securing jobs. The President of the Catalan Government, Artur Mas, suggested the new Spanish Government follow Catalonia’s example of reaching an agreement with the social agents to improve the labour market.

Both governments are currently defining their strategies and building their respective cases in preparation for a discussion on the issue in the coming months. The Spokesperson for the Catalan Government, Francesc Homs, has sent a clear message to the next Spanish Prime Minister: Catalonia will only accept a negotiation on a new fiscal model, which would reduce the financial transfers to Spain’s poorer regions. If the Spanish Government refuses to discuss about it, Catalonia will organise a citizen vote on it. Over the past few days, the People’s Party has hinted that the Catalan Government’s main claim is not a matter for discussion.

Artur Mas, the President of the Catalan Government, has announced the main austerity measures to reduce Catalonia’s public deficit and meet the 1.3% objective for 2012. Mas stressed that these measures are to be taken in order to reduce the deficit and not harm social policies. The Catalan People’s Party was satisfied with the plans, while the Left-Wing parties warned that they would harm the middle classes. The Catalan President also sent a warning to the next Spanish Prime Minister: a new “fiscal agreement” for Catalonia might be “one of the few opportunities left” to rebuild relations with the rest of Spain.

The conservative People’s Party (PP) has won the Spanish General Election with an absolute majority. The PP obtained 186 MPs in the 350-seat Spanish Parliament, its best ever result. The Socialist Party (PSOE), who are the current Spanish Government, obtained the worst results in its history, winning just 110 MPs. In Catalonia, another historical change has taken place: the Centre-Right Catalan Nationalists (CiU) have won in the Spanish elections for the first time. The Socialists lose 44% of their MPs in Catalonia, and their main candidate Carme Chacón, is in a bad position to lead the PSOE after Zapatero. The PP continues as Catalonia’s third party, despite an improvement in its results.

Catalonia is the only autonomous community where the Socialist Party has clearly won, but has lost around 35% of its MPs, according to the exit poll released by TV3. The People’s Party (PP) will remain Catalonia’s third biggest force, behind the Centre-Right Catalan Nationalists (CiU), who will increase their share by some 40%. The exit polls released at 20.00 CET, when the polls closed, indicate an absolute majority for the PP and an historical defeat for the Socialists throughout Spain. The PP will get between 181 and 185 MPs, when the absolute majority is 176 seats. The election day has been calm, with a lower turnout than in the 2008 elections, particularly in Catalonia.

Catalonia and the Basque Country might be the only Autonomous Communities in Spain without a victory for the People’s Party (PP). The Socialists are likely to win once again in Catalonia, but they risk loosing 40% of their seats. If they slump even further then they risk being overtaken by the Centre-Right Catalan Nationalist Coalition (CiU) or even the PP. A quiet electoral campaign has come to an end, with three main unknown answers: if the Socialist party will get its worst results over the past few decades, if they will also lose in their stronghold of Catalonia, and how the international financial markets will react in the coming days.