BarcelonaNatàlia Mas is the first Minister of Economy in the history of the Generalitat, but nothing in her office hints at the slightest concession to vanity. No academic recognition, no photographs with authorities, no memories, no family pictures. Only the model of a robot, a vestige of its past watching over the industrial world, and a visual poem framed by a can of sardines break the ornamental austerity of the office that belonged to Jaume Giró a few months ago. Mas, who is part of the small group of Catalans who speak of the European Central Bank in the first person and pronouncing it what’s upin English, attends to the ARA and does so following a commandment that has been imposed: “I am cautious in my words”.
Expansive budgets have just been approved. Happy?
— I am happy, because it has been a complex negotiation process and because at the moment we are in it is very important to have these budgets and what they imply to increase the investment and spending capacity of the Generalitat. It’s the biggest jump in 17 years.
Do you think these budgets are for two years or for a single year?
— I hope they are for a single year, only. I think we must keep in mind that we are managers of the economy, of resources, managers or definers of public policies. Blocking these resources and not allowing them to be deployed with all their strength at a time of great need… We should try to avoid this.
Does El Prat airport need to be better connected with long-haul flights?
– Yes. El Prat airport is well connected for short-haul flights, for European flights that have more of a tourism component. And there is a lot of potential that we are not taking advantage of. The Catalan economy has started a very important process of opening up to the world and from the point of view of our exporters there are areas of the world with which we need to be better connected: the North American Pacific, the most distant Asia , etc. We must improve these connections if we want to be consistent with this bet of more added value in our economy.
El Prat airport is well connected for short-haul flights, for European flights that have more of a tourism component, and there is a lot of potential that we are not taking advantage of”
Does expanding these connections mean expanding the track or making a new one?
— This is where the technical debate must enter. We must debate it with territorial consensus, not with an Aena proposal that arrives one day and seems to evaporate the next, defined 600 kilometers from here.
The B-40 agreement should be completed before the end of the month. Are you negotiating with the State?
— We are people of our word. Also in this area of the B-40, where we have always explained that the vision of the Republican Left Government was different. This is what we will have to write.
The budgets are approved with the support of the PSC and En Comú Podemos. Would you like to regain the majority with Junts per Catalunya?
— Yes, and this was the top priority. In fact, 80% of the requests were accepted. We disagreed more about tax changes that involved an aggregate revenue loss of 700 million euros, which is impossible to assume.
But the budget has 1.4 billion more than the previous one.
— A part of this increase must go to cover the demographic challenge we have to face. We are also at a time when the United States is attracting a multitude of industrial and technological investment, at a time of great international competition, and that means investments and public spending. And we cannot do all this by reducing the Generalitat’s budget by 700 million. It is unfeasible.
Does it portend a new battle with the State for the deficit target?
— There are two key points. One is, obviously, the chronic deficit suffered by Catalonia, suffered by every citizen of Catalonia, every company, no matter what they think, what they vote, every year. It penalizes us with this annual deficit of between 18,000 and 20,000 million euros. And then the budget deficit and how it is distributed between the central administration and the communities.
With what deficit has the Generalitat ended the financial year in 2022? 0.6%?
— We are just closing these figures. We will be above this benchmark, but I prefer not to indicate a specific number.
This is a time for prudence, but also for courage”
Catalonia has already recovered its pre-pandemic GDP, and the IMF and the Chamber have improved their forecasts for the year 2023. Is it a time for optimism?
— It is a time for prudence, but also for courage. Both the European economy and the Catalan economy are dodging the omens of last summer better than expected. The job market is at its lowest unemployment figure in 15 years and exports remain strong. The concern is very high prices; they are moderating, but they imply a very important pressure on the cost of living for families and companies.
Unemployment is at 9%. Is it a number that is already good?
– No. The European average is a few points below and we have to walk towards reaching this Eurozone average. We must eradicate premature school leaving, because in many cases they are young people who later have a more complicated career path, and we must make this strategy consistent with reindustrialization; this means more professional training.
Families are suffering from inflation and interest rates. What forecast do you have?
— A few hours ago I was talking to a person linked to the European Central Bank and trying to convey this to them, and they are well aware of it. For many families who have an annual update the cost of mortgages may not have been updated yet; the average increase in the mortgages we have analyzed is around 85 euros per month. Interest rates will rise a little more and this rise will stop towards the summer. But they won’t go down again immediately. It will depend on factors we have little control over, such as the war in Ukraine.
The average increase in the mortgages we have analyzed is around 85 euros per month”
Is Catalonia in a good position to attract investments?
— It is in very good condition. In the last year and a half we have been able to attract the most important investment in history in Terres de l’Ebre, the Austrian Kronospan, and in Camp de Tarragona the most important investment in twenty years in Catalonia, the South Korean ILJIN Materials. Also the multinationals Cisco, Intel, AGC… We are in a sweet moment, but obviously zero complacency. Investors ask us three questions: human capital, which I think we are doing well; freight mobility by rail, and renewable generation capacity.
Are we at a good level in railways and renewables?
— In the generation of renewables, we have a long way to go and many tasks to do. It will be up to us to visualize the industrial estates in a different way. In the area of the railway, we have also not invested heavily in it for a few years. Councilor Fernández is very clear about this. We are planning investments, but the most important is the Mediterranean Corridor, and here we must make the maximum effort and demand.
The State has announced this week a fairly significant investment to create an Atlantic Corridor. Do you fear that this could be detrimental to the implementation of the Mediterranean Corridor?
— I hope not, and we demand not. This is absolutely essential infrastructure. We will do everything possible so that obviously this does not stop or drag on any longer.
The Generalitat will return to the markets with green bonds”
Will the Generalitat issue debt again?
— Yes, the Generalitat will return to the markets; it is an element of gaining sovereignty that we want to have. We have been improving the rating and we are in a good situation.
And how much would you like to leave?
— We remember that the Generalitat has not issued to the markets since 2012, too long ago. It will have to be an amount of a few hundred million and, from there, keep increasing. But not everything depends on us, there are also other communities and prior authorization from the State is required, which we have already requested; we are in the process of negotiation.
Would they use green bonds?
— Yes, that would be the goal, yes.
Abandon the idea of turning the ICF into a bank altogether?
— No, we are not abandoning it, but I must say that the ICF is much more than the license. But since the Banking Union was created in November 2014, the European Central Bank has not given a license to a public bank. I think the look has to go beyond that.
Whoever wants to talk about fiscal pressure, should also talk about the fiscal deficit”
Is the fiscal pressure in Catalonia what you would like or would you prefer if Catalans paid more or less tax?
— The fiscal pressure that Catalonia has is not the highest in the State and is below the euro zone average: it is a pressure of between 39% and 40%, and the euro zone has a fiscal pressure of 42%. In any case, fiscal pressure and fiscal deficit go hand in hand. Whoever wants to talk about fiscal pressure, should also talk about the fiscal deficit, because one thing goes with the other. The fiscal pressure we have in Catalonia allows us to adequately finance public services. To compare with Madrid, its lower fiscal pressure results in a much lower financing of public services: 12% less resources per capita in health; in education, 24% less; in culture, 80% less; in R&D funding, 70% less. If you don’t enter, you can’t spend and invest.
And should fiscal policy be harmonized in Spain?
— Yes, because, if not, there is a tax competition that destroys public services and does not benefit anyone. All these investors we mentioned, quite honestly, have never questioned Catalonia’s taxation. What I have been questioned about is that we do not have sufficient railway infrastructure or issues that pertain to the Generalitat or the State in investment. Who thinks that reducing taxes ends up generating more economic growth… Madrid has an economic growth model based on absorbing activity around it, but we have twice as many exports as there, an industrial sector with many points above, net creation of companies in Catalonia has systematically been higher than in Madrid and we also have a lower unemployment rate. We need to visualize the data more and not so much a rhetoric of overtaking: he overtaking of Madrid is with the territories around it, not with Catalonia.
You experienced the exit of companies up close in 2017. What impression did the exit of Ferrovial d’Espanya make on you?
— 2017 was a time of anxiety. We quickly saw that these were notarial changes, of registered office, but that there were no changes in workers or productive activity. I believe that the change in Ferrovial is linked to what we said: we must be able to harmonize fiscal frameworks that guarantee that Europe remains the continent of the welfare state.
The first PERTE published by the State, that of the automotive electric vehicle, was truly tragic”
What is your assessment of the implementation of European funds so far?
Several readings: One is that it has taken longer than we would have liked, and that the management of these funds has been excessively centralized. I would differentiate the most massive calls from the biggest calls, the so-called LOSSES. The first PERTE published by the State, that of electric vehicle automotive, was truly tragic. Seat depended on this PERTE to be able to guarantee the electrification of Martorell and in the resolution that was there it received only 20 million, because only 30% of the funds that could be allocated were allocated. Here the Generalitat had to step in with help to Seat to guarantee that the electrification of this factory was not canceled from Germany. The first resolution did not recognize that ILJIN Materials, which is part of the Seat Consortium, was key in the value chain. We had to fight it with the State, it was able to be corrected, but it is constant wear and tear. At the moment we are the territory of the State that has mobilized the most funds. This year and next year will really be the time for the effective arrival of these funds in the economy.