A better system
The financing agreement between the Spanish government and ERC, signed on Thursday by Pedro Sánchez and Oriol Junqueras, and presented this Friday by the Minister of Finance, María Jesús Montero, represents a step forward, a significant reform of the current and outdated model, which had clearly proven detrimental to Catalonia. Reforming the system substantially was not easy. It has been done, and some taboos have begun to be broken, for example, the taboo of ordinality. Of course, anti-Catalan demagoguery is once again making noise, but that's all it is: demagoguery. With the numbers and the details in hand, Catalonia is by no means lacking in solidarity. Nor, conversely, is it so far removed from the progressive collection of taxes; in fact, the goal of the agreement is to move towards 100% of personal income tax revenue and close to 80% of VAT.
In any case, what is now being proposed, and is pending approval in Congress, is a significant change. It will be difficult for the Catalan nationalist parties, and the parties of the plural majority that supports Pedro Sánchez's government, to renounce this. It is a fairer system for Catalonia and, at the same time, beneficial for all the regional governments. In the case of Catalonia, it effectively represents a net gain of €1,792 per year per inhabitant (€4.75 billion annually in total). But to one degree or another, all the regions will see their resources increase, especially Andalusia, Catalonia, and the Valencian Community. Furthermore, the new system incorporates mechanisms to cap Madrid's tax burden and prevent it from engaging in tax dumping—lowering taxes thanks to the system's contributions—thanks to the capital city effect paid for by all citizens of Spain.
The incorporation of the basic concept of ordinality – that Catalonia receives less per capita than another region that has contributed less – the end of the advance payment system – regional governments that wish to receive it will receive what they collect in real time – and new parameters for calculating the adjusted population – although the financing model is not incorporated.
Beyond the now-agreed common regional financing system, the PSC and ERC will begin a negotiation process, linked to the budget approval, to also improve the structural funding for Catalonia's own unique powers, such as the Mossos d'Esquadra (Catalan police), language, prisons, and the Labor Inspectorate. A further increase for the Generalitat of Catalonia's coffers is also anticipated here. And the entire blog is still in progress regarding the transfer of major infrastructure projects with their own funding.
We are, therefore, facing a short- and medium-term change to improve funding, a crucial issue for the country's progress and social cohesion. If until now we saw the glass as half full (or half empty), now the bar is set higher. Naturally, with the prospect of a more comprehensive agreement, it is always necessary to aspire to more. But it would be absurd to squander this window of opportunity that the post-Process political situation has made possible, especially considering what the alternative to a progressive government is in Spain.