Misc 21/08/2019

Catalan government slams Madrid over “financial stranglehold”, demands outstanding €1.3bn payment

It hopes to pass the 2020 budget bill with backing from several political groups who “feel comfortable” with it

2 min
La portaveu del Govern, Meritxell Budó

Meritxell Budó, the Catalan government’s spokesperson and minister for the Presidency, slammed Madrid over the non-payment of €1.3bn (€800m from an advance payment, plus €480m worth of VAT). “This government won’t just sit back and watch how we are being denied what we are owed, which amounts to €1.3bn”, Budó said in an interview with Europa Press, a news wire service. The Catalan government spokesperson warned that [without the funds] “none of the policies that would allow to us move forward will be possible: universities, healthcare, police and emergency services”. Budó complained that Madrid expects the Catalan government “to run a deficit above the limit while we meet the goals on expenditure and public debt at the same time. Failure to do so would mean that we wouldn’t be able to pay public employees the cash we deducted [from their wages during the recession] in 2012 and 2013 and we wouldn’t be able to afford the salary rises that government workers are entitled to”, she said.

Threat of financial takeover

Bundó complained about “the threat of a financial takeover” by the Spanish government when 2018 —she claimed— was actually the first year that “all the targets mandated by the law were met”. Bundó went on to say that, while other regional government are also struggling financially, Catalonia’s case is particularly “sore” because it is one of the regions that “creates the most wealth and contributes the most to Spain’s GDP”.

On the subject of VAT, Bundó urged the Spanish government to amend the law so that the 2019 payment of the tax revenue will not generate €480m in losses by the end of the fiscal year, following the new tax collection system. “We have begun to feel its effects this year, as the system defers payment by one month and we do not get the revenue collected until the new year”. She emphasised that an agreement had been reached to change the law so as to avoid this problem.

VP Aragonès to lead budget talks

Budó also revealed that Catalan vice president Pere Aragonès will lead the talks to facilitate an agreement on the 2020 budget, aided by several ministries. Aragonès will sit down with the three parties that are willing to discuss the budget (the CUP, Comuns and the PSC) with a view to closing a deal with which they can “feel comfortable”. The minister for the Presidency remarked that “we must be able to tell the public that we can come to an understanding on anything that will help this nation to move forward”.