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

BarcelonaHe ERC refuses to negotiate the budget This has disrupted the path the government had laid out to approve the 2026 budget. The expectation was that the Republicans would lift their veto this weekend and that the executive would present the budget bill this week, with the aim of having it approved by the end of March or, at the latest, after Easter. All of this fell apart after Esquerra decided to maintain its refusal to negotiate the budget, arguing that it does not see sufficient guarantees for the collection of the personal income tax (IRPF), the condition it had set for discussing the figures. Despite the Republicans' 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 is seen as a show of pressure on the Republicans.

The Government will stage a public demonstration this afternoon to show the support of social partners for the Government to update the 2023 budget. This is a gesture that the Pere Aragonès government already used to pressure the Socialists and the Comuns party on the need to approve the budget. However, despite Monday's move, the Government must decide whether to proceed with the initial plan despite not having the support of ERC (Republican Left of Catalonia) for now. 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 ERC's support, but what seems clear is that the Government will not bring it 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 (Agència Tributària de Catalunya) to collect income tax. Illa didn't explicitly commit, but 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 confirmed that the Spanish government would not take any further steps to transfer the authority for Catalonia to collect personal income tax. In other words, the Treasury remained where it was: it maintained 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 central government and the regional governments validated a "networked" management of personal income tax, that is, shared between the central government 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.