Budgets to invest and promote growth

Although the intensity with which they are defended depends on the possibility of their approval, few politicians can publicly question that having a budget is better than not having one. This is probably why President Salvador Illa has opted to play it safe and force ERC to take a stance and, in any case, provide a solid argument for why they are prepared to block it.

The budget bill that entered the Catalan Parliament this Friday, if it passes the chamber's scrutiny, would put an end to the anomaly of operating with a budget that has been extended for three years and is based on supplementary credits to avoid completely paralyzing the government's ability to maneuver, even though it limits it. It is better to debate, enter into negotiations, and try to make the necessary changes than to hinder the possibility of the budget's passage. In addition to the PSC and Comuns, the Catalan government has also secured the support of social partners, employers' associations (Foment del Treball and Pimec), and unions (UGT and CCOO). "It's better to have it than not," they say.

One of the important aspects of the project drawn up by the Ministry of Economy, headed by Alícia Romero, is investment, after two full years at a slower pace. Thanks to the current savings achieved, it is projected that 4.146 billion euros will be reached, an amount that would once again boost the economy, and which is even above the level of 2023, the last approved budget, which still had the lifeline of the Next Generation EU funds.

With a still-dynamic economy, projected to grow by 2.1% this year, albeit with a slowing trend (it grew by 2.7% in 2025), now would be a good time for expansionary spending. Periods of strong revenue growth are precisely when public spending should be accelerated, given that income inequality remains stable but should be decreasing. Another noteworthy element: €1.9 billion earmarked for housing policies, an unprecedented amount that could mark the return of the public sector to intervention in an activity essential to the well-being of the population.

The draft budget, which aims to reduce the deficit to 0.1% of gross domestic product (GDP), still contains some elements that remain a cause for concern. One of these factors is the debt burden, currently at around €90 billion, which will decrease from 28.4% of GDP to 27.4%, but could fall to 22.2% only if the cancellation of part of the outstanding debt with the Regional Liquidity Fund (FLA) is finally approved. The other factor is debt interest payments, which will double due to rising interest rates, reaching €1.616 billion. This could actually be considered the fifth largest department of the Generalitat (Catalan government), ahead of, for example, the Department of Business and Labor (€1.506 billion). Reducing the debt will help lower the financial burden, and after refinancing €3.5 billion of the 2023 FLA (Regional Liquidity Fund) with banks for the first time in thirteen years and securing €292.75 million in new long-term financing for the private sector for the first time in fourteen years, the path to recovery would be paved. That's why budgets are also necessary.