2023-11-14 01:10:46
Pedro Sánchez’s pacts with the Catalan independentists to facilitate his new investiture raised a lot of controversy in Spain, but not only because of the future amnesty law, but also for its agreements on regional financing and tax distribution with the state.
In exchange for the votes of the separatist parties, essential to access a new mandate as president of the government, the socialist leader made some great concessions, in addition to committing to promote an amnesty law for independence supporters prosecuted by the Spanish justice system, mainly for their involvement in the secessionist attempt of 2017.
At the request of the Republican Left of Catalonia (ERC), the pro-independence party that now governs the region, Sánchez accepted cancel 15,000 million euros (about 16,000 million dollars) of the debt contracted by Catalonia with the State after the financial crisis of 2008.
Although the socialists promise that this agreement will also be extended to all the regions that resorted to this fund – created by the State to help the autonomous communities suffocated during that complex period -, The agreement raised many suspicions in many communities, both left and right.
The pact signed on Thursday with Together for Catalonia, the second major pro-independence formation, provides encourage the return of companies that moved their headquarters from this dynamic region of northeastern Spain, as a result of the failed secession attempt six years ago, such as Caixabank or Naturgy.
The socialists also assure in the text that they intend bet on “measures that allow financial autonomy” of Catalonia and to facilitate their access to financial markets, in response to Junts, which demands on its side “the transfer of 100% of all taxes paid” in the region.
This issue is very sensitive in Spain, where the Constitution guarantees broad fiscal and financial autonomy to the regions, endowed with important powers, especially in areas such as health or education.but which at the same time requires important solidarity between the territories.
Currently, two regions – the Basque Country and Navarra – already manage all the taxes paid there, of which they send a percentage to the central State for the items it assumes.
Its economic and budgetary weight is not, however, comparable to that of Catalonia, the industrial engine of the country that concentrates 20% of the Spanish GDP and 16% of its population.
According to the Fedea think tank, Catalonia made a net contribution to the administration in 2021 – that is, the difference between the money it paid and received in interregional financing – of 2,170 million euros.
The general secretary of the PSOE, Pedro Sánchez. Photo EFE
Only two other regions out of a total of 17 also had a positive contribution: Madrid (6,310 million) and the Balearic Islands (334 million).
The critics
For supporters of the fiscal status quo, the transfer of all taxes to the Catalan authorities would run the risk of reducing the resources of the central Stateto the detriment of the poorest regions such as Andalusia (south) or the Canary Islands archipelago.
Such a measure would cause “the breakdown of the principle of equality between all Spaniards” and would create “first-class Autonomous Communities and second-class Communities,” denounced the association of tax inspectors.
Pedro Sánchez’s Socialist Party opted for “privileging a minority to the detriment of a majority, and equality among Spaniards”, considered the head of the opposition (PP, right), Alberto Núñez Feijóo, also critical of the cancellation of a part of the Catalan debt.
A reproach shared by several economists, who fear that a Pandora’s box, costly for the State, will now be opened, after several regions such as Andalusia have already demanded that part of their debt be canceled based on equal treatment.
“Debts are paid”, José María Rotellar, director of the Economic Observatory of the Francisco de Vitoria University, estimated on his side in a forum that he fears a “loss of credibility” and “an insecurity in who is going to assume future regional debts.”
Led by a socialist baron very critical of Pedro Sánchez, the region of Castilla-La Mancha (center) threatened the Executive with filing an appeal to court against the pact with the Catalans.
Trying to calm things down, the socialists recalled that, for now, there is still No decision has been made on the tax issue.
“At no time has it been proposed that the Socialist Party or the government share the transfer of 100% of the tax,” explained the Minister of Finance, María Jesús Montero.
For their part, the salary organizations said on Monday in a statement that we must “return to economic orthodoxy and budgetary rigor”insisting on “the right of companies to decide where they want to carry out their activity.”
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