Daniel Ritort

Catalonia proposes a new fiscal relationship with Spain

Artur Mas, president of Catalonia, in the parliament

Artur Mas, president of Catalonia, in the parliament

An historical vote took place this morning in the Catalan parliament. An overall majority of the Catalan parliament gave an answer to Catalan financial problems.

The agreement would see the creation of a completely independent Catalan tax agency, able to collect and manage its own taxes.

The majority was achieved after the positive votes of the ruling party, Convergència i Unió (CiU), as well as the pro-independence party Esquerra Republicana (ERC), the Greens of ICV-EUiA, and an independent member.

Most of the members from the Catalan Socialists abstained because they do not agree that the tax agency should be independent from the Spanish pot. However, one of its members, Ernest Maragall, voted in favor of the independent tax agency, therefore rebelling against the party line.

The pro-Spain parties People’s Party (PP) and Ciutadans (C’s) as well as the pro-independence party Solidaritat (SI) voted against.

According to Artur Mas, president of Catalonia, the new fiscal pact involves starting a difficult negotiation with the government of Spain but the time is “now or never”, he also argued that “never” is not an option.

Mas argued that at the peak of the economic crisis, it was more critical than ever to defend the need for a new and radical change to the fiscal arrangements between Catalonia and Spain.

Mas said it has no sense that out of all the territories, Catalonia is ranked third for the amount it pays in taxes to Spain, but then ranked tenth for the amount it receives in return. He also added it has no sense to hurt those territories with the most competitive productive economic model when what is needed is to boost them to get out of the crisis.

Mas argued in the parliament that Catalonia is not asking Spain to make it a donation but to treat it fairly.

According to Mas, if Catalonia was not paying 9 percent of its gross domestic product every year to the Spanish treasury, it would not be suffering its current financial difficulties. He added that with only half of that money Catalan deficit would be 0 and Catalonia would still have the funds to avoid the cuts that Catalan government is implementing.

Mas said he wants Catalonia to pay bilaterally to Spain according to the powers that Spain retains, such as Monarchy, and an amount for solidarity purposes to pay for the services that some regions cannot afford.

He warned this solidarity cannot continue as it works now, when Catalonia gets ranked below several of the regions it is actually subsiding.

The fiscal pact proposal passed this morning will now have to receive the approval of the Spanish government and parliament, where there is an overall majority of the right party People’s Party. The Catalan branch of the party, lead by Alicia Sánchez, voted against the plan.

During his speech at the parliament, Mas warned that if the fiscal pact fails and no agreement can be reached with Spain, there will be consequences and some parties will make proposals of future for Catalonia.

In fact, Esquerra Republicana urged Mas to call early elections and organize an independence referendum if Spain refuses to grant Catalonia the same fiscal system already enjoyed by the Basque Country.

Mas noted that Rajoy’s opposition will depend a lot on the attitude of the Catalan branch of his party. However, he also admitted that neither he nor the Catalan government can guarantee that the negotiations and the strategy to acquire a new financing system will be successful.

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