The debate on the financing of Catalonia is presented as the star issue, in the economic aspect, of the electoral debate on 12 May. Both ERC and Junts have opted for the reissue of the proposed fiscal pact that was formulated by the convergent government of Artur Mas, at the beginning of the process, at the end of 2012, in that meeting of the latter 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 like the great loose cotton of vindictive purity.
The tax pact proposal is simple to formulate. The Government regulates and collects all taxes in Catalonia and agrees with the Central Executive what amount of what has been paid 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 to say, fixing more clearly than in the case of the provincial 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 revenue 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 fiscal pressure that should also give rise to an identical situation with regard to 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 power relations between parties and public opinion.
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. In the capital, most of the richest people live and they 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 have to bear higher burdens to compensate for the holes they create in the accounts of their communities the flights of the wealthiest to Madrid. Now those governed by the PP have decided to emulate their leaders in the capital by also lowering these taxes. Of course, with the not-so-hidden objective of the State covering 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 is now added the desire of the barons of the PP to compensate with the State’s heel for their populist policies of tax cuts in order to maintain their ideological positions not always corroborated by the reality And that is why it is relevant 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 half way, and has become a crossroads for the Government of Pedro Sánchez, with an open confrontation with the tough, and majority, sector of the judiciary. But in this case it was not a question of matters in which economic effects or a worsening of the 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 field 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 rivals socialists, as in the case of Emiliano García-Page’s Castilla-La Mancha.
The legislature that has just begun with baptism seems to announce a progressive accumulation of political frictions. And that of regional financing, a subject that has been pending for a decade now, the time since the current system has expired, is one of the most capable of blocking the gears of government action. It seems that Sánchez will have little room to address the matter with the opposition of the majority of the communities and a good part of their barons, refractory to bear the cost of a general debate on regional finances centered around the demands of Catalan nationalists .
To these internal problems must be added the new international situation. First of all, the recovery from next year of the fiscal rules of the European Union, with the emphasis on reducing the debt and the public deficit. We must add the context of the war climate created in Europe, which will have significant economic consequences and demand all the political attention. It will not, therefore, be the best scenario to pull heels out of the hat to satisfy the autonomous communities, despite the help that the drop in interest rates and the maintenance of growth will bring.
Sánchez and his finance minister, María Jesús Montero, will only have the path of specific offers that particularly affect Catalonia, but also the rest. In the style of the announced transfer of the management of Rodalies or the partial forgiveness of the debt of the FLA. Catalan independence is facing a new dilemma on the matter. Either he accepts the new framework and turns the tax compact into a kind of maximum program for the indefinite future, or he starts playing funeral music in the legislature.
