CATALONIA -- Spain has pocketed 245 billion euros from Catalonia over past 24 years - VilaWeb
Spain has pocketed 245 billion euros from Catalonia over past 24 years
According to data from the Catalan government, the fiscal deficit costs each Catalan two thousand euros annually
The fiscal deficit between Catalonia and Spain has been constant over
the course of the last twenty-six years, from 1986 to 2011. The annual
average is 8% of Catalan GDP, according to figures from the Catalan
government. The latest data was published yesterday, as Minister of
Finance and Knowledge Andreu Mas-Colell presented the assessment of the
fiscal balance sheets for 2011, which reveals a fiscal deficit of
Catalonia with respect to the Spanish State of 15 billion euros, that
is, more than two thousand euros per capita that go to Madrid and don't
come back. The size of the fiscal deficit over the past three decades is
overwhelming: more than 245 billion euros that have left Catalonia and
stayed in Spain.
Two years ago, the Catalan Government began to
present data about the fiscal deficit since 1986: these are neutralized
data, in millions of euros and as a percentage of Catalan GDP.
“Neutralization” means that they are adjusted to erase the effect of
Spanish public sector’s financial variability, which makes it possible
to compare one year with another. Consequently, the fiscal deficit in
1986 was 6.5 billion euros or 6.8% of the GDP (each Catalan contributed
1076 euros to the State which didn't return), and in 2011 that figure
rose to 15 billion euros, 7.7% of Catalan GDP.
2011 data
Catalonia sent 15 billion euros to Madrid in 2011 which did not return, according to the
fiscal balance calculations published
yesterday. The 2011 fiscal balance, like in previous years, was
calculated using two standard methodologies: the cash flow method and
the benefit approach. According to the cash flow method, Catalonia
contributes 19.2% of the total income of the state administration but
receives only 14% of the state's total spending. Therefore, Catalonia
contributes with a proportion that is bigger to its weight in the
Spanish State's GDP (18.6% in 2011) and in contrast, receives a fraction
of spending that isn't even as large as Catalonia's percentage of the
population with respect to the state as a whole: 16%.
The cash flow method measures the economic impact generated by the
state administration's activity in a territory and, as the government
points out, is especially important in times of financial crisis and
unemployment. According to this method, Catalonia's fiscal deficit in
2011 was 15 billion euros.
With the benefit approach, spending on state-wide fixtures is also
considered to benefit individual territories. For example, the civil
servants in the State’s Ministry of Education, including Minister Wert,
live in Madrid and mostly spend in Madrid. Under the benefit approach,
the cost of the Ministry is considered to benefit all the people in the
Spanish State. Or the Prado Museum in Madrid, which in 2013 alone
received 38 million euros in State money (compared with 11 million for
all cultural institutions combined in Barcelona), 25% of which is said
to benefit residents outside of Madrid. With the benefit approach,
Catalonia's fiscal deficit was 11 billion euros, that is 5.7% of the
Catalan GDP.
"Both approaches are correct," says economist Elisenda Paluzie,
"that's why the Generalitat calculates them both. The important question
now is to determine what additional resources we'll have with
independence. The answer is an average of the two methods, around 7%. We
would save by reducing redundancy—not having to pay for superfluous
ministries in Madrid, for example—and also benefit the Catalan economy
by additional spending in Catalonia to make up for some services no
longer provided for by Spain."
Latest calculations
The last publication of
Catalonia's fiscal deficit was a year ago, with data from 2010. In that
year, the fiscal deficit with respect to the Spanish State was 16.5
billion euros, or 8.5% of Catalan GDP.
The fiscal balance measures the redistribution effect between
territories due to the Spanish Administration's fiscal policies, that
is, it shows the difference between what the State spends in a given
area and the amount of income that it takes from that same area in order
to finance the central State budget. There is a "fiscal deficit" when
the income taken from a territory is more than what is spent for the
citizens in that territory, that is when there is a net exit of fiscal
resources.
