Former Basque Finance Minister says Catalonia was offered an independent tax regime in 1980

MadridAt an event organised by ARA, former Catalan president Jordi Pujol stated he demanded an independent taxation system for Catalonia –similar to the one the Basque Country enjoys– during Spain's transition to democracy, in 1980. The claim, however, has been denied by Pedro Luis Uriarte, who was then Basque Finance Minister. Uriarte claims that the Spanish government offered a similar deal to Catalan nationalists and that they refused. He also claims that he was a direct witness to the offer.

Uriarte says textually: "Contrary to what Mr. Pujol stated, in the summer of 1980 he was offered in my presence an Economic Agreement for Catalonia, when we were negotiating ours, and he refused it for a series of reasons that I have explained in books that I have since published. That is the truth". In fact, Uriarte devotes a chapter of his book The Basque Economic Agreement (a personal view) to the offer that the then Spanish Minister of Finance, Jaime García Añoveros, had made Catalan finance minister Ramon Trias Fargas in his presence. The meeting allegedly took place between June and September 1980, before the regional financing law was approved.

Pujol's letter in 2006

Uriarte's book also includes a letter that Jordi Pujol himself sent in 2006 to Pedro Miguel Etxenike, also a former Basque minister. In the letter Pujol said: "It could be said that Catalonia did not ask for the independent taxation, but Catalan nationalism did". The reason for this affirmation is that, as the ex-president has explained this week, during the negotiation of Catalonia's Statute of Autonomy, Convergència and Esquerra voted in favour of independent taxation, but the rest of Catalan parties voted against it.

Uriarte's version is also maintained by former Basque MP Emilio Olabarría, who at that time was an advisor of the Basque Nationalist Party (PNV) parliamentary group. He provides more details. "It was not an identical agreement to ours, it was not symmetrical, but it was a special regime," he explains to ARA. But why did CDC refuse? According to Olabarría, the discrepancy arose earlier: "It was not considered appropriate [...] because it was a unilateral assumption of risk. When you have independent taxation, if you do not collect taxes, the State does not compensate you, and at that time the economic situation was dire. And he adds: "To Roca the taxation issue seemed an antiquity, a thing of the past, but for us it was capital."

It should be remembered that the Basque Country and Navarre kept their independent taxation systems at the end of the Carlist wars in the 19th century. These are the only remains of Charters in Spain, after they were abolished in 1876. From that moment on, Biscay, Guipuzcoa, Alava and Navarre began to pay a fee to the State, which they had not done before. After the Civil War, Franco suspended this agreement in Biscay and Guipuzcoa, considered enemy provinces, but kept in Alava and Navarre, two territories where the Spanish Treasury has never directly collected any taxes.

On the other hand, Trias Fargas's biographer, Jordi Amat, does not quite believe the story of the offer. "What was the need for the [Spanish] government to offer independent taxation when nobody here was demanding it and the Statute [of Autonomy] had already been approved," he argues. According to Amat, Trias Fargas was the only one who had studied the issue of financing since the 1960s, but he found himself quite alone "because taxation was not on Catalan nationalism's agenda; there were other priorities, such as language or self-government". Moreover, according to Amat, he received little support.

Olabarría recalls that the PNV established as a condition for not voting against the Constitution (it abstained) the recognition of historical rights in the first additional provision. The PNV's version is supported by former first secretary of the Catalan Socialists Raimon Obiols, who was a member of parliament in the constituent legislature. "Antoni Castells was right in what he said. Pujol and Roca did not want significant responsibilities in collection because they could blame Madrid," he says. Obiols is not aware of Añoveros's offer, although he considers it "probable", but he remembers that he never had the feeling Catalan leaders were fighting over this issue.

The socialist position

But what did the socialists defend at that time? Olabarría states that they did not even want independent taxation in the Basque Country. And Obiols explains that the Catalan Socialists did not defend anything more than "fiscal co-responsibility". When the Catalan Statute of Autonomy was approved, independent taxation was not even brought up. "And it did not come up again until 2011-2012 with Artur Mas", he concludes.

Former Catalan minister Josep Huguet corroborates that during the Transition, when he was in the PSAN, only Trias Fargas and the then ERC leader Heribert Barrera defended independent taxation. Both Huguet and Amat point out a key element to explain why most of the left were not in favour of the agreement. "The migratory element carried a lot of weight and there was the idea that we had to show solidarity with the rest of Spain," says Amat. "They thought that Catalonia had to be exemplary and implement a system that could be extrapolated to the rest," adds Huguet, who regrets that this ended up harming Catalonia.

Albert Carreras, professor of Economic History and Institutions at UPF, gives a historical framework to better understand the moment. "At that time the priorities were nationality and the accelerated path to the Statute [of Autonomy]," he explains. "Possibly we will not find an original sin", explains Carreras. "But there was a very different initial position of the Basques and Catalans; the PNV abstained and in Catalonia there was a broad consensus that what we wanted had been achieved."

Huguet claims that ERC recovered the idea of independent taxation in the early 1990s, and even forced a study commission in the Catalan Parliament on the issue that served as the basis for the proposal of the new Statute that was sent to Madrid and was trimmed down "with the Mas-Zapatero pact". The fact is that, later on, Artur Mas brought the idea back under a new name (fiscal pact), a proposal that was then publicly endorsed by Jordi Pujol, who regretted not having demanded more during the Transition. Precisely, Rajoy's rejection of the fiscal pact in 2012 was one of the initial drivers of the Independence bid.