Alícia Romero: "Of course I want to collect all the taxes, but it has to be done right."

BarcelonaVisibly pleased with the regional financing proposal presented by Spanish Vice President María Jesús Montero, but aware that it's impossible to obtain 100% of what they want, the Catalan Minister of Economy, Alícia Romero (Caldes d'Estrac, 1976), received ARA at the Palau de la Generalitat, convinced that Catalonia will succeed. She also stated that she doesn't see it as impossible for the proposal to go ahead.

Is what the Spanish government has presented a reform or a new financing system?

— It's more than just a reform because what we're doing is changing the paradigm of the regional financing model. We're moving from one based on expenditure – I have expenses related to certain responsibilities and I pay you for them with a transfer – to one based on revenue to cover those responsibilities by transferring a portion of the taxes.

Is it enough to guarantee public services?

— Based on the figures we have, yes. It's true that we've suffered from underfunding for many years. This dates back to Cristóbal Montoro's time, when there was an increase in state revenue that wasn't reflected in the autonomous communities. In fact, the Catalan Court of Auditors presented a report on the Generalitat's debt over the last 20 years and estimated that between 27% and 39% was due to underfunding. We believe that with this new model, the principle of financial sufficiency will be met, and we'll be able to fulfill our shared responsibilities.

Will these 4.7 billion, plus an additional 4.8 billion, be enough to meet the ordinality?

— It's being fulfilled. The model has various parameters, and these calculations allow us to comply. We are the third largest contributor and third largest recipient of funds. And how do we guarantee this? With the legislative changes currently being worked on, incorporating all these parameters used to calculate the resources allocated to each region. If this is clearly reflected and ordinality is established as a guiding principle, we will obviously have to comply, and we will. Vice President María Jesús Montero has been very clear on this point.

Calculating the adjusted population (taking into account variables such as geographical dispersion and aging) is key to the funding system. There are some very important factors in Catalonia that haven't been considered, such as immigration, tourism, and the cost of living. Are you satisfied?

— I'm satisfied because in a negotiation you never get 100%. The cost of living was one of the elements we wanted included. We didn't get it. Negotiating means making concessions, and other things have been included. There's the issue of healthcare spending, the cost of pharmaceuticals, which is very high and rising. We've included something important for Catalonia, like university education, which wasn't included before. It's clear that you can't get everything, but now the negotiation process begins, and I think there's room for all those political forces that want to contribute to the model to do so.

And do you think they will find enough support?

— What I would like is for all of us to be able to be useful to the citizens, and one way to do that is by trying to improve what is being proposed, without making unrealistic or impossible proposals. I would like Junts to be able to sit down at a table and try to improve what has been presented today. I believe this is what would make them useful, and it is the reason why citizens vote for us, so that we can do things that improve their lives.

All of this falls under the umbrella of shared powers. Regarding the specific powers held by Catalonia, along with some other regions, when will negotiations begin, and to what extent will the success of these negotiations facilitate a budget for Catalonia?

— One of the things we have always said, and that Esquerra Republicana has also said, is that one of the conditions for negotiating the budget was the presentation of the financing model. The financing model has been presented. It complies with the investiture agreement reached with Esquerra. However, it is true that this model refers to shared responsibilities. Now we must continue working on the specific needs, which have different paths that we have already explored. One is the improvement and increase of regulatory capacity. Another is greater tax revenue and management capacity, on which we are also working. The financing of shared responsibilities, the specific needs, and the investment consortium are all issues that we have already opened with the Spanish government and that will need to be defined further. I understand that Esquerra isn't making these elements a condition for negotiating a budget because it's clear we wouldn't have one then. Some of these elements are complex, and we're working on them, especially regarding regulatory capacity, revenue collection, and tax administration. But in the case of funding for non-homogeneous responsibilities, it's clear that it must be done—as the minister stated—through the minister. We're working on it and determining what portion of the tax revenue should go toward funding non-homogeneous responsibilities, just as we've done with homogeneous ones.

And can this be quantified?

— Currently, the latest figure we have for the transfer of powers to us for non-homogeneous responsibilities, such as the Mossos d'Esquadra (Catalan police), prisons, language, and the Labor Inspectorate, is 3.9 billion euros. We would like to improve that funding.

Vice President Montero has repeatedly emphasized that the spending of this money will be closely monitored. She was referring specifically to Madrid, but this affects all autonomous communities. How will this be done?

— They clearly have the capacity to control spending, especially since many regions require their services, for example, regarding the Regional Liquidity Fund (FLA). There's also the Independent Authority for Fiscal Responsibility (AIReF), which is a control mechanism. One of the important elements of the model is tax dumping. It can't be that someone with a certain tax capacity reduces it and yet this doesn't affect their share of total revenue. This has been incorporated into the calculations and, therefore, must also be incorporated into the law. This is something that hasn't happened until now. Having a tax floor, a minimum threshold for certain taxes that prevents anyone from going below that level and allows those who want to raise it to do so, is reasonable and fair. What doesn't make sense is that today regions like Madrid or Andalusia lower taxes and, at the same time, ask the central government for more resources.

Does it have anything to do with the fact that the model's basket includes 100% of transferred taxes and others, such as bank deposits?

— This is the normative value, the capacity you have. If you don't use it afterward, that's your problem. What can't happen is that you end up taking advantage of this element that harms the whole, and therefore this normative value is taken into account in the model, even if you're not contributing. This is incorporated, and then we'll have to see how it's ultimately specified in the law. This government defends shared prosperity. Fiscal policy is a major element of wealth redistribution. What we cannot condone is what Madrid and Andalusia are doing: with one hand they lower taxes for the rich, and with the other they ask for more resources from the State, at the expense of the income we all generate.

The model has received criticism, including from the Socialist president of Castilla-La Mancha, Emiliano García-Page, who has called for...

— I have great respect for what the regional presidents and García-Page say, but I think we're not talking about that yet. We're talking about having a better model for Spain that also benefits Castilla-La Mancha considerably. What I would like to know is Castilla-La Mancha's opinion regarding this new model.

Knowing that it benefits Castilla-La Mancha because it obviously increases its income, why do you think there is this reaction?

— Well, I don't know, I suppose he has some hidden agenda that I'm unaware of. But anyway, he'll explain it to us eventually, because when faced with a proposal that's good for Spain and for Castilla-La Mancha, he comes out with a response like this...

There were a couple of things that ERC was very interested in, and I suppose the Catalan government was too, namely VAT for SMEs and receiving the revenue instantly, which are...

— We will obviously opt for the VAT scheme for SMEs. It's a unique feature that has been incorporated into the system, which clearly benefits us and represents €1.4 billion in revenue for us—a very significant amount. We are the region that could potentially collect the most through this method. On the other hand, we currently receive payments two years in advance, with the advances calculated based on a predetermined amount. This is detrimental to us because we don't have the funds available when they are generated within our region. One of the most innovative and courageous measures taken by the Spanish government is to eliminate the two-year payment schedule; therefore, a common fund is created with all the resources collected in Spain, and the portion corresponding to the central government and the portion corresponding to the regional governments are immediately allocated.

But they won't raise all the...

— We can't collect them right now because we're not prepared to do so. With the proposal on the table, we can receive the revenue immediately without having the collection mechanism. If we don't have it, the Spanish agency can collect it, but that revenue should be instantaneous. This is a major step forward. I've heard voices that I think haven't listened properly or don't want to, because it's impossible, unfeasible, for the Catalan Tax Agency (ATC) to collect all taxes today; we're not ready, no matter how hard we're working. Receiving the revenue the moment it's generated within the territory is crucial for our public finances.

As a council member, would you like to collect the taxes?

— Yes, of course I want to collect them, but I want to do it right, and I have to do it in a solid way. Right now, the ATC isn't prepared. It's an agency that manages 5 billion euros, and we should be managing more than 30 billion. We've just amended the Tax Agency law to allow us to have an IT department. We didn't have one. The Spanish agency has 1,500 IT specialists. We don't have any. It's clear that we need a major transformation of the ATC to be able to manage all taxes, starting with personal income tax, which is the agreement we have with Esquerra.

But now it's time to get support...

— A model has been presented. This presentation must be translated into legislative amendments that must be submitted to Congress and require significant majorities. We must be able, in the coming months, to forge the necessary alliances. I understand that there will be diverse opinions from the outset. I would like us to calmly examine the documents and for those who genuinely want Catalonia to benefit to contribute improvements and not simply dismiss the proposal without offering any alternative. The proposed alternatives are unfeasible and unacceptable, not just for the Catalan government, but for the entire Congress. Politics is the art of the possible, and at this time, I believe it is possible to approve a new financing model like the one presented to us, with the necessary improvements, but other options are not feasible. We should all be realistic in this regard.

Would you expect a different policy from Junts with the return of Carles Puigdemont?

— I would like Junts to engage in useful politics and be of service to its voters. Therefore, I would like to be able to sit down with Junts and work together to examine the funding proposal we have on the table and how we can improve it. I would like to do this, instead of simply arriving with a yes or no and closing the door without much more than that. "I want the moon." Yes, but the moon isn't possible right now. And therefore, we must try to do politics to improve the lives of citizens. Juntos believes there are other aspects that can be improved, that can be changed. Well, let's sit down at a table. This is doing politics.

Fomento, for example, has said that the model seemed insufficient to him, but asks that, since there will be more revenue, the tax burden be reduced.

— We are against the principle of lowering the tax burden. For whom, and for what purpose? And to achieve what? Tax policy allows for the redistribution of wealth. They are in favor of eliminating inheritance taxes, not us. We can sit down and talk with Junts about many things, but we will not eliminate taxes like inheritance tax. Having more resources to lower taxes and ending up with the same amount doesn't make much sense.

They don't advocate lowering taxes, but... what about raising them?

— No, we can adjust some aspects, and we can work with family businesses to see what adjustments can be made to certain taxes to favor the economic activity of a type of company so typically Catalan, for example. In fact, last year we already reduced income tax in the lower brackets. We always have a goal. Ultimately, it's not about raising or lowering them for the sake of it, but because it helps or incentivizes a certain attitude or action.