Lessons from failed budgets

1

The president of the Generalitat, Salvador Illa, presented a budget proposal to force negotiations with ERC, but the gamble backfired. The first lesson of this political crisis, which has led him to withdraw the budget proposal, is that the government cannot act as if it has a majority it does not. The investiture agreement brought Illa to the presidency of the Generalitat, but he needs to negotiate and uphold agreements to continue making progress in the legislature.

2

Oriol Junqueras handles pressure well. Four years in prison are a training in patience of biblical proportions. Out of Parliament and barred from running for office, Junqueras needs to establish his own identity to make it clear that Esquerra is not a mere musk partner, as Junts repeatedly tells him at every opportunity.

3

Negotiators from both parties have learned that Catalonia needs to definitively move from audacious rhetoric to policy and have been given a dose of reality. On the one hand, the PSC cannot force its PSOE partners. The supposed federalist project will depend on the PSOE's need and conviction, or it won't happen at all. The PSC can accept compromises in its own name, not in the name of the PSOE, and, in any case, these compromises will not lead them to vote against the PSOE's interests.

4

Spain is in election campaign mode, and the Socialists will do nothing to fuel the refrain—both Catalanophobic and effective—that Catalonia enjoys privileges. The PSOE believes it has more than paid for the support of the separatists in Madrid and Barcelona with the amnesty and the financing system, and that progress in tax collection cannot be made with the Andalusian elections still pending. The main obstacle, but not the only one, is the Minister of Finance and Vice President of the Sánchez government, María Jesús Montero. The Andalusian candidate has stated publicly and privately that she will not facilitate the legislative changes necessary for the Catalan Tax Agency to collect 100% of personal income tax.

5

With the withdrawal of the budgets, the cards are dealt again, and ERC has the opportunity to move away from demanding the IRPF as a condition. sine qua nonMaking the budget solely contingent on compliance with the personal income tax agreement turned the negotiation into a trap. This is what Oriol Junqueras grasped in his conversation with the Spanish Prime Minister when he clearly understood that the PSOE would not follow the PSC and the PSC would not vote against the PSOE. If the agreements are honored, it will not be now, in an electoral context of life or death for the PSOE in the battle against the PP and Vox, and witnessing the collapse of the electoral options to its left.

6

Negotiations are now reopening with the aim of approving a budget that Catalan society needs. The context of geopolitical uncertainty, with the Iran-Iraq War escalating into a regional conflict, will worsen the economic outlook and drive up the prices of basic goods such as energy and food. Social unrest is on the rise, and years of inflation, lack of access to housing, structural underfunding, and an economy based on low wages are beginning to take their toll. If traditional politics fails to provide answers, the populists, who have never governed and promise a nonexistent happy world, will emerge victorious.

7

The PSC and ERC have learned that one mistake cannot be solved with another, and that entering a spiral usually leads to an uncontrollable escalation. Both partners have conceded, agreeing to a timeout that allows them to re-establish the foundations of negotiations and find common ground so that both sides can gain something by participating and maintaining governability in the Catalan Parliament. Catalonia needs a budget, and if it has one before the summer, Illa will have conceded today to gain stability as the legislature nears its end.

8

The crisis has immediately changed ERC's position in Madrid, where it has a divided parliamentary group, with a leader more dedicated to the psychoanalysis of the Spanish left than to parliamentary action in line with his party's interests. Rufián will have to compete with Nogueras's hyperactive political and media presence to make his votes count.

9

Calling elections in Catalonia was a possible but undesirable option that the political deadlock has postponed. Polls point to a rise in support for Aliança Catalana, which would prevent the pro-independence forces from forming a coalition and perhaps even a left-wing tripartite government.

10

The final lesson is that of the opposition. Together has left the political scene in Catalonia. The delay in its internal restructuring, pending the return of its undisputed leader, threatens to come too late for the reconstitution of the center-right electorate. Internally, they know this.