Pressure on ERC: Salvador Illa allies with unions and employers over the budget

BarcelonaHe ERC refuses to negotiate the budget This has derailed the Catalan government's plan to approve the 2026 budget. The expectation was that the Republican Left of Catalonia (ERC) would lift its veto this weekend, allowing the executive branch to present the budget bill this week for approval by the end of March or, at the latest, after Easter. However, this plan has fallen apart after ERC decided to maintain its refusal to negotiate the budget, arguing that it lacks sufficient guarantees for the collection of personal income tax (IRPF), the condition it had set for discussing the figures. Despite the ERC's opposition, however, the President of the Generalitat, Salvador Illa, is pressing ahead and will sign the budget agreement with the unions and employers' association this Monday. This represents a show of pressure on the ERC.

The Catalan government will stage a public demonstration this afternoon to show the support of social partners for updating the 2023 budget. This is a gesture that the Pere Aragonès government already used to pressure the Socialists and the Comuns party regarding the need to approve the budget. However, despite Monday's move, the government must decide whether to proceed with the initial plan despite not yet having the support of the ERC (Republican Left of Catalonia). In other words, whether to approve the draft budget law in the executive council without the backing of the Republicans and, therefore, begin the parliamentary process, or not.

According to sources consulted by ARA, there is debate within the executive branch about whether to maintain the initial plan or wait to secure the support of the ERC, but what seems clear is that the government will not bring the budget to a vote this Tuesday, as planned. Once that happens, the countdown will begin for a process that could last about five weeks. This would be the time Salvador Illa would have to try to convince ERC to approve the budget and thus join the Comuns, who already gave their support last week.

In an attempt to win over Oriol Junqueras's party, President Illa recently expressed his "full commitment" to Catalonia collecting personal income tax (IRPF), as the Republicans had demanded. But they went even further: they demanded that the Catalan Socialist Party (PSC) commit to voting for the amendments that Esquerra Republicana (ERC) was to introduce into the financing law, amendments that would legally empower the Catalan Tax Agency to collect income tax. Illa didn't explicitly commit, but he spoke of "promoting the necessary parliamentary agreements and initiatives" to achieve this goal. Although this should have paved the way for an understanding with ERC, it ultimately wasn't enough.

What happened? After a meeting this Friday between Oriol Junqueras and Pedro Sánchez, ERC realized that the Spanish government would not make any further moves to transfer the authority for Catalonia to collect IRPF. In other words, the Treasury remained where it was: maintaining its refusal to resolve this issue. In fact, sources within the ministry on Saturday once again stuck to defending what had been agreed upon in the bilateral commission a few months prior, when the Catalan government and the Spanish state validated a "networked" management of personal income tax (IRPF), that is, shared between the state and the autonomous communities. This agreement differed from the one signed by the Republicans and Socialists for the investiture of Salvador Illa, which stipulated that Catalonia should assume this responsibility.