CATALONIA -- Catalan News Agency - Catalan Finance Minister accuses Rajoy of sidelining and homogenising the Autonomous Communities
Catalan News Agency - Catalan Finance Minister accuses Rajoy of sidelining and homogenising the Autonomous Communities
Barcelona (ACN).- Andreu Mas-Colell,
Catalan Finance Minister, accused the Spanish Government of aiming “to
undo” the system of Autonomous Communities. In a live interview at the
Catalan Public Television Broadcaster on Friday morning, he also
expressed his fear that the so-called ‘coffee for all’ system [the
generalised devolution of the early 1980s that shaped the 17 Autonomous
Communities in Spain] will become a ‘decaffeinated coffee’ system,
implemented ‘in depth’. With this play on words, Mas-Colell was
referring to a deep recentralisation and homogenisation process.
Furthermore, the former professor of Economics at Harvard and Berkley,
denounced “the budget treatment” that the Spanish Government gives to
Catalonia as “totally unfair”. Mas-Colell highlighted the issue just as
the Spanish Government is about to publish the so-called fiscal balances
between Catalonia and the Spanish State, which is the difference
between the taxes paid by Catalan citizens and companies and the money
received for services, infrastructure and investments. In this vein, he
proposed that an international and independent body should calculate
those fiscal balances, in order to increase transparency. Apart from
this, Mas-Colell said that he is not expecting to meet the Spanish
Finance Minister Cristóbal Montoro, who is in Barcelona for a People’s
Party meeting, this weekend.
Catalonia has a perpetual fiscal deficit
Despite manifold requests over many years the Spanish Government has
only published the so-called fiscal balances on one occasion. Back in
2008, with data from 2005, the Spanish Finance Ministry stated that Catalonia had a fiscal deficit of between 6.38% and 8.70% of its GDP
that year, depending on the calculation method. This represents a
fiscal deficit of between €13 billion and €17.5 billion. The Catalan
Government published a wider study in 2012 with data until 2009, showing
that since 1986, Catalonia had transferred each year an average of 8% of its GDP
for services, infrastructure and investments made in the rest of Spain
using the money-flow formula. This accounts for an average of €16
billion per year. In terms of taxes, 43% of the money raised in taxes in
Catalonia is spent outside of it. Furthermore, in May 2013, the Catalan
Government published the fiscal balances for 2010, showing an 8.5% fiscal deficit.
The International Monetary Fund discourages excessive fiscal deficits
as it regards them as unfair and unsustainable. Catalonia is the
European region with the highest accumulated fiscal deficit over
decades. On top of this, Catalonia has the highest fiscal pressure in
Spain, while public services such as education or healthcare receive
less money per inhabitant than in other parts of Spain. This makes the
Catalan public sector, including the Catalan Government, which
exclusively manages education, healthcare and social policies in
Catalonia, under-budgeted.
There are many indicators showing this reality; one of them is the
number of public employees. In January 2013, there were 40.7 civil
servants for every 1,000 inhabitants in Catalonia, while the Spanish
average was 57.4 and it was as high as 79.6 in the Autonomous Community
of Extremadura. In Catalonia 11.1% of all the people with a job work in the public sector.
The figure at Spanish level rises to 16.4%. This means that for every 2
public employees in Catalonia, in the whole of Spain there are 3 of
them. In addition, in some areas of Spain, such as Extremadura, the
figure represents 26.7%.
The Catalan Government depends on green light from Madrid
Andreu Mas-Colell regretted that the Catalan Government will not have
access to international financial markets in 2014 either, since the
Spanish Executive continues to restrict this access. For this reason,
the Catalan Executive is totally dependant on the Spanish Government’s
loans, which are presented to public opinion as financial assistance
from the Madrid authorities. “It is obvious they want to sideline us”,
stated Mas-Colell. However, he added that “when our creditors know we
can pay back the loans, there will not be any problem”. Meanwhile,
Catalonia will still be dependent on the money arriving from Madrid.
Furthermore, he said that, currently, “the split of fiscal interests
within Spain is clearly biased towards the Spanish Government”, which
harms Catalan interests.
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