The Catalan business community believes that the financing model "is not enough" and urges the parties to negotiate.

BarcelonaThe organizations that make up the so-called G8 business group—the Barcelona Chamber of Commerce and the other 12 Catalan chambers of commerce, the College of Economists, the Circle of Economy, PIMEC, FEMCAT, Barcelona Global, RACC, and the Barcelona Trade Fair—together with Foment del Treball, have drafted a joint manifesto on the new financing model presented by the Spanish government. The government of Pedro Sánchez and ERC stated that the model "cannot be considered sufficient." Following the harsh statement issued by Foment del Treball—the employers' association representing large Catalan companies—on the same day the Spanish government detailed its proposal, in which Foment del Treball labeled it "clearly insufficient," the G8 organizations have now aligned themselves with Foment del Treball's criticisms in a joint statement. Cecot has also endorsed the statement, reiterating that they consider it "crucial to seize the parliamentary window of opportunity to consolidate structural advances for the Catalan economy."

The document states that the proposal "represents a significant improvement over the current model, although it cannot be considered sufficient, as it only addresses some of the demands made by the undersigned entities in the note of March 5, 2024." Thus, it considers it "a starting point for achieving greater levels of fairness and transparency in territorial financing, although it falls short of the self-government levels to which Catalonia aspires." Furthermore, the entities urge Catalan political parties "to work together to improve the proposed model and ensure that the changes are consolidated in the future." Some sources tell ARA that the text was promoted by the G8, with particular involvement from the Chamber of Commerce chaired by Josep Santacreu, and that it had been in development "for weeks." After incorporating amendments to the draft from the other G8 stakeholders, the same sources indicate that it was the Chamber that contacted the Ministry of Public Works to endorse the manifesto. The proposed reform of the regional financing model, publicly presented by the Ministry of Finance on January 9th, would mean an additional 4.7 billion euros annually for Catalonia. As expected, the reform was applauded by the PSC and ERC parties, but criticized by Junts per Catalunya, who consider it too unambitious and say it fails to address the Generalitat's financial problems, and by the PP and Vox parties, who denounce it as a concession by the central government to the demands of the Catalan government.

Political reactions

Furthermore, the fact that Fomento issued its own statement criticizing the proposal strain relationships between employers' associations and the Catalan government, and especially between the president of the employers' association, former Unió Democràtica leader Josep Sánchez Llibre, and the president of the Generalitat, Salvador Illa. In this regard, following the publication of the manifesto, the Minister of Economy, Alícia Romero, celebrated "that the Ministry of Public Works has rectified its position and is part of the consensus." Romero acknowledges that "we must continue working to improve regulatory capacity and tax administration," and assures that she is "working" to achieve this. For his part, the Junts vice president who is leading the financing agenda, Antoni Castellà, asserted that the manifesto demonstrates that "the employers' associations have had to come out and correct the Government" because "it lied" when it announced support from the Catalan business community. Thus, he reaffirmed that "the position is very clear" and that he points out that "this financing model is insufficient," outlining "a series of points" that they have been denouncing with demands that, in his opinion, are "protected" by the special tax arrangement. Junts, which has been meeting with various employers' associations, notes that they agree on identifying "the shortcomings" and "what the future path forward might be." Regarding the starting point of the agreed model, Castellà stressed that it is a beginning because "it opens the debate," but that the proposal must be to leave the common regime. "A great opportunity" to achieve this, which is why he insisted on working "together" with ERC, PSC, and the employers' associations to "impose" the special tax arrangement on Pedro Sánchez. "The Spanish government has an obligation to say whether or not it agrees to begin a bilateral negotiation process with Catalonia for a special tax arrangement," he pointed out.

Investment Criteria and Shortfall

In the manifesto published this Thursday, the main criticisms made by business organizations regarding the model are, on the one hand, the redistribution and population-adjusted criteria, which they consider "debatable" and which "continue to disregard the cost of living to ensure that the purchasing power of the allocations received is similar in each territory." "The failure to incorporate the cost of living as an adjustment criterion is a significant shortcoming of the new system. It implies that with nominally similar resources, the actual capacity to provide public services can differ significantly between territories. Therefore, it reduces the effective capacity to guarantee equal access to public services," the text points out. Regarding the now well-known concept of ordinality—the principle that one autonomous community should not end up receiving less money than others that contribute less to the common fund—the manifesto also points out shortcomings: "In addition to improving the coherence and fairness of the system, with the information available, it appears that the new proposal respects the principle of ordinality for Catalonia 2027," the document states. However, the organizations criticize that "although the logic of the proposal is built around the principle of adjusted population [...], it should be noted that [the principle of ordinality] would not be met in terms of the actual population (according to the census)." Thus, they believe that "it is necessary to ensure that ordinality per adjusted inhabitant continues to be met beyond 2027; given that the new model does not guarantee this, it should be one of the priority areas for improvement to consider," the text adds.

Among the key points to consider, the manifesto also highlights the infrastructure investment deficit, although this is not directly linked to the financing model. This issue is particularly relevant in the current economic climate following the recent rail collapse, a consequence of low state investment in Catalonia. In this regard, the text argues that increasing state investment in Catalonia, "in line with its contribution to GDP and its role as an economic engine for the country as a whole, is an equally effective approach that simultaneously contributes to reducing the fiscal deficit and improving the country's progress and well-being." The situation of Catalan infrastructure "is critical, as is currently the case, revealing an accumulated infrastructure deficit." for a value similar to that of the Generalitat's annual budget"A figure that the Ministry of Public Works places at around 42.5 billion euros.

In conclusion, the manifesto considers that this new model "should be understood as a starting point that represents an improvement over the current one, but which is not sufficient in certain aspects that would have to be developed if we want to respond to the demands that have been made historically." "It is applicable to all the autonomous communities under the common regime, and all of them can benefit." "In this sense, many of the criticisms that have been made of the proposal, based on the fact that it arises from the pact between Catalan parties and the central government, are not understandable," they assert.