The debate on the financing of Catalonia is presented as the star issue, in the economic aspect, of the electoral debate on May 12. Both ERC and Junts have opted for the reissue of the fiscal pact proposal formulated by the convergent government of Artur Mas, back at the beginning of the process, at the end of 2012, in that meeting with the then president Mariano Rajoy. One more proof, for those who still need it, of the extent to which the debate in Catalonia has returned to a kind of starting point: from the pact to distribute assets and liabilities between two independent states to the reformulation of economic relations between two territories integrated into one. Now, after the amnesty battle, it emerges as the great cotton of protest purity.
The tax pact proposal is simple to formulate. The Government regulates and collects all taxes in Catalonia and agrees with the central executive how much of the income is transferred to the central Treasury to cover the corresponding part of the State’s expenses. Also the contribution to cover the economic needs of the rest of the territories; the so-called interterritorial solidarity quota. It is the Basque model but perfected, that is, establishing more clearly than in the case of the regional quota the contributions of the community to the central coffers.
In practice everything is more complicated, since taxes are not just a sum of public income generated in a territory. They start from a political decision about who should pay more and how much depending on their level of income and wealth. Equal tax pressure that should also give rise to an identical situation in terms of rights in services received from the State. And the determination of individual and territorial contributions to the central State will always be conditioned by politics and the relations of forces between parties and public opinions.
As is known, this equality no longer exists in Spain, despite the noise of denunciation with which the proposal to improve the financing of Catalonia is received, especially in Madrid. The majority of the richest people live in the capital and they are the ones who pay the least, in relative terms and in relation to their income.
Flagrant inequality paradoxically designed by the champions of equality among all Spaniards, but who do not care that in reality it is the residents outside the capital who must bear higher burdens to compensate for the holes they generate in their accounts. communities the flight of the wealthiest to Madrid. Now those governed by the PP have decided to emulate their capital leaders by lowering those taxes as well. Of course, with the hidden objective of the State being the one to cover the imbalance with more transfers.
An additional problem for the financing reform proposals formulated from Catalonia. To the traditional rejection of the rest of Spain, there will now be added the desire of the PP barons to compensate with the State’s heel for their populist policies of tax cuts to maintain their ideological positions that are not always corroborated by reality. And that is why it is pertinent to ask if there is political room for the proposals formulated by the parties of Carles Puigdemont and Pere Aragonès to come to fruition in a short period of time.
The amnesty seemed difficult, it is still halfway through, and it has become a crossroads for the Government of Pedro Sánchez, with an open confrontation with the hardline, and majority, sector of the judiciary. But in this case these were not issues in which economic damage or worsening living conditions of the Spanish population could be evoked. It is a pure political debate.
On the other hand, territorial financing is a much more fruitful terrain for the exploitation of all phobias and grievances. The PP of Alberto Núñez Feijóo and Isabel Díaz Ayuso, the latter with a visible rejection of fiscal rigor, governs most of the autonomies and even has the support and sympathies of some that in theory are in the hands of socialist rivals, such as in the case of Castilla la Mancha by Emiliano García-Page.
The legislature that has just begun in fits and starts seems to announce a progressive accumulation of political friction. And that of regional financing, a pending issue for a decade now, the time that the current system has expired, is one of those that has the greatest capacity to block the gears of government action. It seems that Sánchez will have little room to address the issue with the opposition of the majority of the communities and a good part of his barons, refractory to assuming the cost of a general debate on regional finances centered around the demands of the Catalan nationalists.
To these internal problems, we must add the new international situation. Firstly, the recovery starting next year of the fiscal rules of the European Union, with an emphasis on reducing debt and the public deficit. Add to this the context of the climate of war created in Europe, which will have notable economic consequences and will demand all political attention. It will therefore not be the best scenario to pull checks out of the hat to satisfy the autonomous communities, despite the help that the decrease in interest rates and the maintenance of growth will provide.
Sánchez and his Minister of Finance, María Jesús Montero, will only be left with the path of specific offers that especially affect Catalonia, but also the rest. In the style of the announced transfer of management of Rodalies or the partial forgiveness of the FLA debt. The Catalan independence movement faces a new dilemma on the matter. Either accept the new framework, turning the fiscal pact into a kind of maximum program for an indefinite future, or start playing funeral music for the legislature.
