A battle for funding on two fronts

The battle over the financing opened up following the agreement between the ERC and the PSC (Spanish Socialist Workers' Party) to invest Salvador Illa is being played out on two parallel fronts: the first is tax collection, which focuses on ensuring that the Catalan Tax Agency manages all taxes, but starting with the most important, which is personal income tax. The second front is the distribution of resources, on which it has been established that there must be a solidarity quota, but with the limit of the ordinality criterion. In this Monday's Bilateral Commission, the Spanish government will adopt the bases of the ERC-PSC agreement, which until now had the endorsement of the PSOE (Spanish Socialist Workers' Party), but not its signature, nor was it included in any official document.

But the core of the issue lies in the specification of the model, and that is precisely what the Republicans and Socialists are currently negotiating on the specific point of tax collection. ERC has decided to focus on what it believes is most feasible to achieve in the short term, which is legal authorization for the Catalan Tax Agency to collect personal income tax. The complexity of this step is enormous, and, as was the case with Renfe, it cannot be done with the speed promised. The Spanish Tax Agency cannot be replicated in Catalonia in one or two years, so it will have to be done step by step. If all goes well, before the end of the month there should be an agreement on how this transition will be carried out and what legislative changes will be necessary.

The other major front is the system itself, which will affect all the autonomous communities under the common regime and is the one that most frightens the PSOE government, just as it did the PP government before it. If Catalonia is the third largest contributor per capita, it must also be the third largest recipient per capita. This is where estimates ranging from 18 to 25 billion euros appear, half of which would go to just two of the most disadvantaged communities, Catalonia and Madrid. The fight for funding will end up benefiting everyone, and especially Madrid. This is a matter of principle: the welfare state that Pedro Sánchez claims to defend is actually underfunded because it depends on the autonomous communities.