The Catalan economic world is pressing for the reform of the regional financing system to be tackled as soon as possible and to overcome a model that penalizes both Catalonia and other communities. In an unprecedented action, 21 institutions of Catalan civil and business society have signed a joint declaration to demand an “ambitious” change to the current model, since they consider it to be “not transparent, fair, or efficient”. This is expressed by the thirteen chambers of commerce, Foment, Pimec, FemCat, the College of Economists of Catalonia, the RACC, Barcelona Global and the Cercle d’Economia. In a later statement, Cecot also showed support for the document.
The economic fabric as a whole proposes three ways to repair the deficiencies they observe and look for a system that guarantees “economic progress and social well-being” of many autonomous regions and of Catalonia in particular. These ways would be a “deep” reform of the current system, a fiscal pact or the establishment of a “federal” system.
The claim takes place at a time when the negotiations between the Catalan parties and the central government are overshadowed by the Amnesty law. The facts of the process and its judicial derivatives have focused the relations between ERC and JxCat with the PSOE, while the economic portfolio remains in the political background. The Catalan entities are now back on the front line and are asking for an agreement between the set of political forces to move towards new funding.
A federal model or a fiscal pact would ensure the transparency and efficiency of the model, according to the signatories. “Accompanied by a mechanism of solidarity, the two systems would be beneficial for Catalonia and for the autonomous communities as a whole”, they add. Regarding the federal funding model, with the mirror of the United States, they point out that it would allow the State and the autonomous regions to share the same tax bases, at a time when some communities are competing for ways to lower taxes to attract companies and fortunes, such as that of Madrid. In this way, the different administrations would count directly and within the same fiscal year “with the revenues that correspond to them”. As they explain, the implementation of the model would only require a reform of Lofca.
Regarding the fiscal pact, they emphasize that it would also allow progress towards a “more transparent” model, while ensuring “the financial sufficiency of Catalonia”. With this pact, the Generalitat would administer and collect all the general taxes in the territory, and assume a regulatory power similar to that of the regional communities.
Both the fiscal pact and the federal system should be accompanied by a mechanism of solidarity with the rest of the communities, they add. The reform of the current model, on the other hand, should be “deep and wide”, to ensure “financial autonomy and improve management and tax capacity”.
The entrepreneurs believe that the current model takes resources from some communities in an “unfair and inefficient” way, in addition to causing a polarization of society. In addition, they remember that Catalonia is the second community (without taking into account the Basque Country and Navarre) in GDP per capita, but it is in tenth place in terms of resources received. If the difference in the cost of living is taken into account, Catalonia falls to number fourteen. For this reason, they believe that territories like Catalonia, with a higher population density and economic potential, must receive “a volume of investments proportional and adequate to their needs, and in accordance with the weight in terms of GDP in the whole of the Spanish economy”.
Finally, they demand that the fiscal balances of all the autonomous communities with the State be made public and guarantee a greater execution than has been budgeted.
It remains to be seen whether the political parties will take up the claim of the economic world. The Minister of Economy, Natàlia Mas, yesterday reiterated the Catalan Government’s commitment to a “single financing” model, a proposal they are preparing. The aim is, in any case, to negotiate bilaterally with the Central Executive. The Spanish Government was reminded of its desire to reform the funding model, but in a general way for all communities.
