Because there are elections in Andalusia, Catalonia will not have a budget until June.

This morning, around eight o'clock, the Catalan Government and Esquerra Republicana staged the pact they reached last night, which we discussed yesterday in our analysis and which we anticipated this morning in the print edition of ARA:

The government is considering withdrawing the budget before Friday.And so, this morning, the Catalan government and Esquerra Republicana (ERC) jointly announced that the budget would not be voted on this Friday. Instead, supplementary credits would be approved to ensure that the administration, aid, and investments would not be halted. ERC maintained that it would vote for its amendment to the entire budget, which would have resulted in the bill's defeat. To avoid a parliamentary defeat, Salvador Illa decided to withdraw his budget proposal. At 9:30 a.m., President Illa read a statement at the Palau de la Generalitat, framing the situation in a conciliatory tone, reiterating that stability equals a budget, and appealing to the understanding of what he had said by the "progressive parliamentary majority." In his statement, he avoided explicitly stating that there would be no budget the day after tomorrow, but rather that it would be presented at a later date.

Salvador Illa: "Dear fellow citizens. I am pleased to address you all following the agreement announced a few minutes ago by the Socialist Party of Catalonia and the Republican Left of Catalonia. An agreement to provide Catalonia with a new budget. As you know, our country has updated accounts."

In other words, all this means that Junqueras has won the power struggle we mentioned between Isla and Junqueras. Or, if you prefer, Illa and Junqueras have reached a stalemate, thus making Esquerra's threat to bring down the budget the day after tomorrow credible, in exchange for guaranteeing Isla that he will be able to pass a budget in 2026. Late, in June, but he will be able to pass it.

Based on this analysis, we have been speaking with the Catalan Government and Esquerra Republicana (ERC) over the past few weeks, including today. There was satisfaction within ERC: they understood that the Catalan Socialist Party (PSC) needed time to process the loss, which is why there has been no agreement within the disagreement until now, because ERC hadn't budged from its position. And they hadn't budged because they considered presenting a budget without negotiation or agreement, with only 42 seats, to be a truly outrageous undertaking. To quote them: "To force us through the system? No. We remain where we were, ready to help the country move forward."

When I spoke with a source in the Catalan government this morning, I asked why they had presented a budget only to withdraw it. The answer was straightforward: so that Catalonia could have a budget in 2026. If they hadn't withdrawn it now, there wouldn't have been one in June. The Catalan government is withdrawing the budget "to stabilize Catalonia and give it a new budget. If that means taking it out to put it back in, so be it."

Further translation: The Catalan government has paid a price to Esquerra Republicana (ERC) to avoid upsetting Pedro Sánchez. You can imagine María Jesús Montero, a politician with a very tough character, telling Sánchez that on top of going to Andalusia and facing a certain defeat, the last thing he needs is to have to go... ceding the management of 100% of the IRPF to the GeneralitatNote that all this political theater we've witnessed is because the demagoguery surrounding Catalonia is monumental. After all, there will be a budget before summer.

Good morning.