Salvador Illa: "We have agreed on the best and fairest funding for Catalonia"

Barcelona"We have agreed on the best funding for Catalonia. It's fair." This is how the President of the Generalitat, Salvador Illa, assessed the agreement with the Spanish government on Friday. update the regional financing system and to fulfill the commitment he made to Esquerra Republicana (ERC) during his investiture. In an institutional address from the Palau de la Generalitat, the president highlighted the "qualitative and quantitative" leap this represents, with an additional 4.7 billion euros for Catalonia each year—13% more than now—and called on Junts and "all political forces" to support it. While awaiting confirmation of whether the reform will pass Congress, the Catalan government is touting the bilateral negotiations with the Spanish state and the "harmony" with which it has worked with ERC to present a united front to the Ministry of Finance and agree on a more transparent system, which will allow the Generalitat to increase its budget by 12%.

Illa sought to demonstrate the understanding with ERC by holding a meeting at the Palau de la Generalitat with ERC leader Oriol Junqueras, but also with the leader of the Comuns party in the Catalan Parliament, Jéssica Albiach, whom he received immediately. These are the two groups with which the government hopes to reach a budget agreement, now that the new model, which the autonomous communities will discuss at a Fiscal and Financial Policy Council meeting next Wednesday, has been officially announced. Illa, however, maintains that his party has already fulfilled its commitments: "Today we can affirm that we have done the work, we have kept our word, and we have honored the signed agreements," the president emphasized. The meeting with Junqueras at the Palau de la Generalitat comes after the one he held On Thursday, the leader of ERC met with the Spanish president, Pedro Sánchez, at Moncloa Palace.

According to figures from the Catalan government and the ERC party, the new model will mean an increase from approximately €3,408 per capita, based on population adjustment, to €5,200, representing an increase of €1,792. Population adjustment is the criterion used to distribute resources, taking into account demographic needs such as the school-age population and the aging population, which leads to higher spending on healthcare and social services. If the adjusted population is considered (rather than the actual population of 8 million), the model adheres to the principle of ordinality for Catalonia, which will be the third largest contributor and the third largest recipient – previously, with a different population adjustment formula, it was tenth. Based on the actual population, Catalonia will be the third largest contributor and the tenth largest recipient, but government sources downplay this and emphasize that the reference point should be the adjusted population, as it is the figure used to calculate the entire system. Furthermore, the gap in the ranking of regions is narrowing: the difference in resources per capita between the best-funded and the worst-funded is 32.37%, and with the new system it will be 13.98%.

What will become of solidarity?

Neither the Catalan government nor the ERC party have specified figures for Catalonia's contribution to the Spanish state in terms of solidarity, although the investiture agreement explicitly states that it would be structured through a fund that would allow for complete transparency regarding its financial details. During his appearance, Illa addressed citizens in other parts of Spain in Spanish to assure them that Catalonia is not demanding "any privileges," only fair funding to continue developing its self-government and allocate more resources to public services. This call for calm did not work with the president of Castilla-La Mancha, the Socialist Emiliano García-Page., which is already demanding general elections in protest. "Catalonia receives resources in accordance with its unique political, national, and cultural characteristics," Illa assured. He also emphasized Catalonia's historical role in "the great advances for the benefit of Spain as a whole," and reiterated that the agreed-upon improvements do not harm any other region. In fact, no community loses resources: only Extremadura and Cantabria remain the same, and even these two autonomous communities will receive compensation through a separate fund. The argument that the agreement is not only good for Catalonia but also for the rest of Spain was repeated by Illa, Junqueras, and Albiach. Furthermore, all three agreed in asking Junts not to block the reform, the party of Carles Puigdemont. They have already announced that they will make a complete amendment in Congress. In a press conference at ERC headquarters, Junqueras mocked the Junts veto and asserted that it was "surprising" that only the Republicans had been willing to roll up their sleeves on this issue, in his view. Beyond Junts, the CUP also rejects the new model, which they too see as a "clearly insufficient one-size-fits-all" approach. "ERC is letting itself be dragged along by the parties that supported Article 155, and we are not guaranteeing control of the coffers," criticized spokesperson Pilar Castillejo, who reminded everyone that the fiscal deficit is 22 billion euros.

Negotiation of the "special provisions"

In any case, Esquerra does not consider the negotiations with the Socialists regarding the financing model and tax collection to be over. They will exert pressure in Congress with the already registered bill to collect personal income tax. They are calling for the specific details of the new model for Catalonia to be addressed in a second phase of negotiations, specifically regarding the financing of non-homogeneous powers. Currently, Catalonia receives approximately €4 billion to finance these powers, which range from the Mossos d'Esquadra (Catalan police) and prisons to language and labor inspection. The Catalan government's objective, within the framework of bilateral negotiations, is to secure an increased share of VAT revenue, beyond the increase to 56.5% already included in the announced reform for homogeneous powers.

While ERC has cooled the start of budget negotiations, which are contingent on new "specifications" in the tax collection schedule, the Comuns have not been outdone. In a press conference, Albiach asserted that before discussing figures, she must "evaluate" the degree of compliance with the commitments of the third supplementary budget allocation. They expect to do so at a follow-up meeting, which, for now, has no date, and at which they hope the Government will report on the outcome of the pending sanctioning proceedings for non-compliance with the housing law. Without sanctions, the Comuns maintain, they will not sit down to negotiate.

The day concluded with a meeting led by Isla with economic and social stakeholders, along with the Minister of Economy, Alícia Romero, and the Minister of the Presidency, Albert Dalmau, to persuade them of the merits of the agreement, given their skepticism. The major unions, UGT and CCOO, predict that reaching a consensus in Congress will be "difficult," while Foment del Treball has deemed the planned increase in resources "insufficient." Previously, Romero and Dalmau met with the parliamentary groups to explain the content of the agreement. Representatives from the PP, Vox, and Aliança did not attend. All three parties oppose the new funding, albeit for different reasons.