How to unblock budgets (and income tax)

The approval of a regional government's annual budget should be addressed as a priority, separate from other political demands that fall under different institutional purviews. When public accounts are extended, the administration loses the capacity to update programs, adjust budget items to meet new needs, and implement more ambitious public policies. In particular, increasing social spending—in areas such as healthcare, education, and support for vulnerable groups—requires a current and fully operational budgetary framework. Conditioning the approval of this budget on demands whose fulfillment primarily falls to the central government introduces a deadlock that ultimately affects citizens directly, who see policies that are indeed within the regional government's jurisdiction delayed or limited.

From a negotiation methodology perspective, it is important to clearly differentiate the frameworks within which the various demands are situated. Complex negotiations tend to progress more effectively when issues that depend on different actors or institutional levels are separated. In this case, the approval of the regional budgets should be evaluated based on their content and their capacity to improve public services and social cohesion within the region. Likewise, the demand for the complete transfer of management of the main tax, the Personal Income Tax (IRPF), is an issue that necessarily requires the intervention and decision of the central government, even though the investiture agreement between the PSC and ERC included an agreement to promote a unique financing system that moves towards full fiscal sovereignty, based on a bilateral relationship. However, combining both issues in a single negotiation not only hinders agreements but also shifts the focus of the debate from the immediate needs of citizens to an institutional dispute that, while very important, should be resolved in another arena.

A constructive approach would be to formally separate the two negotiations and transform them into complementary processes. The Catalan government and ERC could reach an agreement to approve the budget, unlocking increased social spending, while simultaneously signing a joint political commitment to push the central government for the full transfer of the management of this tax. A shared position would strengthen the legitimacy of the demand and increase its weight in negotiations with the central government. In this way, each issue would advance in the arena where it can truly be resolved: the budget to address the immediate needs of citizens, in the Parliament of Catalonia, and the tax demand, through joint political action by the PSC and ERC, directed at the central government. Continuing to present the transfer as a gradual and negotiated process, waiting until after the Andalusian elections, which will be held no later than June and are a significant factor for the central government, could alleviate current fears stemming from statements by the Minister of Finance, who cannot now publicly declare that the full transfer of income tax will ultimately take place. In negotiation techniques, the ability to consistently find common ground in moments like this is considered a strategic virtue. It's crucial to avoid what's known as the "suicide trap"—that is, becoming trapped in public positions of no return, adopted out of fear of the reputational cost of backing down or waiting, in this case, three months. To avoid this trap, experienced negotiators strive to design solutions that allow both parties to preserve their credibility, buy themselves time to create room for maneuver, and transform rigid positions into a gradual process of convergence. This provides a window of opportunity, in this case, for the party that has more difficulty explaining the agreement to its own stakeholders.