CATALONIA -- Catalan businesspeople annoyed with Spanish Government for not issuing fiscal balances - VilaWeb
Catalan businesspeople annoyed with Spanish Government for not issuing fiscal balances - VilaWeb
The Catalan business community is deeply annoyed with the Spanish
Government for not publishing transparent data on Catalonia’s fiscal
contribution to the rest of Spain and therefore not recognizing the
fiscal deficit.
On Tuesday Catalonia’s main employers
association—Foment del Treball—demanded 'maximum transparency' regarding
the so-called fiscal balances, which calculates how much money Catalan
citizens and companies pay each year to the Spanish Government in taxes
and how much of this money comes back to Catalonia in the form of
investments, infrastructures, and services.
Furthermore, on Monday, Luís Conde, President of Seeliger y Conde,
stated in a radio interview that businesspeople were outraged that the
government had not published the data and that it instead had changed
the calculation method. On Saturday Conde organized a VIP lunch at his
country estate for over 250 guests, including several Spanish and
Catalan ministers, political leaders and some of Catalonia's largest
employers. The closed-doors meeting with Catalonia’s main movers and
shakers and Spanish authorities was held on the second day of the
convention organized in Barcelona by the People’s Party (PP), which runs
the Spanish Government.
The day before the lunch, the Spanish Finance Minister, Cristóbal
Montoro, announced that the so-called fiscal balances would no longer be
calculated and published in their present form. Montoro was supposed to
issue them last December but their publication was delayed without
explanations. Instead, in late January, he said he would publish the
'regionalized public figures' stating the costs of public services per
citizen in March. This announcement caused great astonishment and
frustration among Catalan politicians, businesspeople and academics,
since there the question of how much Catalan taxpayers’ money is spent
in the rest of Spain is a paramount issue. The change of criteria
implies that the Spanish Government refused to publish this information
in order to avoid fueling support for Catalan independence.
Previous studies have shown that Catalonia’s fiscal deficit
represents an average of 8% of its GDP, which means that each year
Catalans give away 43% of their taxes, some €16 billion per year. The
Spanish Government only published this information once, in 2008 with
data from 2005; it posted a fiscal deficit between 6.38% and 8.70% for
Catalonia that year (depending on the calculation formula). Another
study from the Catalan Government showed that an average of 8% of
Catalonia’s GDP has been annually transferred to the rest of Spain
between 1986 and 2010 using the money flow formula (which is the
most-commonly used calculation). This means that Catalans have given
200% of Catalonia’s GDP to the rest of Spain in 25 years, an amount that
nowadays represents some €400 billion. The annual budget of the Catalan
Government, which is soley responsible for public healthcare, education
and social policies,amounts to €29.31 billion for 2014; in 2012 it
posted a deficit representing 2.21% of Catalonia’s GDP (some €4.4
billion).
The fiscal agreement proposed by the President of the Catalan
Government, Artur Mas, to the Spanish Prime Minister Mariano Rajoy in
September 2012 was aimed at addressing this issue. It guaranteed
Catalonia’s solidarity with poorer territories but at the same time it
included some limitations to ensure that Catalan public services were
not under-budgeted compared to other parts of Spain. The proposal had
been widely discussed in Catalonia among all the political parties,
including the PP, and it was backed by most of the Catalan business
community. At the time, it was also backed by some 80% of the Catalan
population. Rajoy rejected the proposal out of hand and refused to even
discuss it in further meetings. From that point forward, the Catalan
President stopped publicly defending a new fiscal agreement and began to
back demands for self-determination. A month ago, a majority of the
Catalan Parliament groups led by Mas agreed on an exact date and the
specific wording for the question to hold a self-determination vote in
Catalonia.
Montoro criticized the fiscal balances but now says they are 'correct'
On Friday, the Spanish Finance Minister justified the decision to
cancel the publication of the fiscal balances by saying they were
'incomplete and incoherent'. Montoro also criticized the Catalan
Government for basing its claims on these figures. However, after
hearing the reactions of the Catalan business community last weekend and
on Monday, he changed his stance. On Tuesday, Montoro recognized that
the fiscal balances are 'correct' and 'they are OK'. However he added
they are 'wrongly used' to support Catalan independence claims. 'There
are people who think that they need to become independent because of
their territory's fiscal balance', he stated. According to him, the
fiscal balances made it possible 'to give the citizens ideas' that were
used to rile up 'spirit of confrontation' instead of 'a unifying
vision'. 'Far from informing the debate, what they have brought is a
confrontation', Montoro said on Tuesday. He insisted that 'territories
do not pay taxes but citizens do' and for this reason he insisted on
providing the 'regionalized public figures' in relation to the costs of
public services. The aim is to offer 'new arguments' and to 'overcome
the limitations of the current method', he added.
The Catalan Government accuses Montoro of 'censorship' and making a 'partisan use' of this information
On Tuesday, the Spokesperson of the Catalan Government, Francesc
Homs, accused the Spanish Finance Minister of making a 'partisan use' of
the information to calculate the fiscal balances between Catalonia and
Spain. Homs said that the Spanish Government was 'censoring' this
information as a 'retaliation' and to 'punish' Catalonia for the
independence demands voiced by a large part of the society. The Catalan
Government asked the Spanish Prime Minister, Mariano Rajoy, to correct
the situation by publishing the fiscal balance figures. He pointed out
that Rajoy had announced they would be published before the end of 2013.
Homs added that changing the criteria and hiding these figures 'does
not help to inform the debate' on the relationship between Catalonia and
Spain.
On Friday evening, a few minutes after Montoro announced he would not
be publishing the fiscal balances, the Catalan Finances Minister,
Andreu Mas-Colell, asked the Spanish Government to publish the
underlying data in order to enable other people to calculate the fiscal
balances. 'Data is power, and we want transparency with the data,'
Mas-Colell insisted. 'We want the data,' he demanded. Mas-Colell, who is
a former Professor of Economics at Harvard and Berkeley, had suggested a
few days ago that the fiscal balances should be calculated by
independent international experts, in order to guarantee transparency
and shed light on this crucial aspect regarding the relationship between
Catalonia and Spain. On Friday, Mas-Colell said he was 'disappointed'
about Montoro’s announcement. Furthermore, on Sunday, the Catalan
President, Artur Mas, stated that not publishing this information is a
way 'to cover up a problem that is a thorn in the side of' the Spanish
Government. It is a way 'to cover up' the 'existing inequalities in
Spain that impoverish the productive territories', he added.
Catalan employers request 'maximum transparency'
The main employer association in Catalonia, Foment del Treball, said
it would be 'a good idea' to publish the fiscal balances with the
traditional methodology. In a press release, Foment stated that the
publication of regionalized public figures does not justify not
publishing the other information. The Catalan employers association,
chaired by Joaquim Gay de Montellà, added that the new calculation can
complement the traditional methodologies and that both should be
offered. Both systems 'can coexist with the objective of shedding
greater light and offering better data, with the objective of helping
make informed decisions based on objective figures'. Foment requested
'maximum transparency' from the Spanish Government.
A fairer fiscal plan for Catalonia is 'the best strategy' to recover from the economic crisis
Besides, the employers association added that solving the Spanish
Government’s investment deficit in Catalonia and the insufficient
funding of the Catalan Government to pay for public services 'is the
best strategy for ensuring the competitiveness of the Catalan economy'.
On Friday, while announcing that the fiscal deficit figures would not be
published, Cristóbal Montoro also praised the Catalan economy for being
Spain’s main engine and 'taking the country out of the [economic]
crisis'. The day before Montoro’s speech it was announced that Catalonia
is leading Spain’s unemployment reduction with a drop of 64,500 Catalan
jobseekers while in the whole of Spain unemployment decreased by 69,100
people.
