Salvador Illa withdraws the budget and ERC no longer sets the personal income tax as a red line.

BarcelonaSalvador Illa decided to push ahead after ERC's refusal to negotiate the budget and presented the bill two weeks ago without having the Republicans' support guaranteed. This pressure tactic against Oriol Junqueras' party failed to budge them from their position: the Republicans had maintained their red line for beginning negotiations unless the Spanish government made a gesture of ceding control over income tax revenue. The budget was headed for failure this Friday, as Esquerra would have voted for its amendment to the entire bill, thus causing it to collapse. To avoid defeat, Salvador Illa decided to withdraw the budget this Wednesday. as some sources consulted by the ARA pointed outand give negotiations with the Republicans another chance. However, Esquerra has also shifted its position and no longer refers to income tax as a condition. sine qua non to negotiate the budget. "It's a very important condition," Oriol Junqueras stated when journalists asked him if it remained an "essential" condition, as it had been until now. In fact, Esquerra has opened itself to negotiating an alternative proposal to the Personal Income Tax (IRPF) if the Catalan Government puts one on the table. The target date for a new budget is before the summer.

Illa appeared at the Palau de la Generalitat to defend the decision, announced shortly before in a joint statement by the PSC and ERC, whose executive committees met early this morning. The president explained that he made the move for "stability and responsibility," and added that he will convene an extraordinary executive council meeting this Thursday to approve a single supplementary budget—which ERC has estimated at more than 5 billion euros—that "guarantees the functioning of public services" while talks with the Republicans resume. Oriol Junqueras has also expressed his willingness to reopen negotiations with the Socialists and took the opportunity to celebrate the Catalan government's withdrawal of a budget "that it had presented unilaterally and without prior agreement." "The conditions weren't right for negotiating a budget because the PSOE had failed to meet its commitments. The Catalan government couldn't impose a budget on us unilaterally," Junqueras argued. The agreement was reached after several meetings in recent hours. In fact, Illa and Oriol Junqueras met until late Tuesday. In a joint statement, the PSC and ERC parties maintain that Catalonia needs a new budget to "continue driving the country forward, to protect public services, and to implement the investiture agreements." They commit to negotiating in the coming months to approve the budget "before the end of the current parliamentary session."

Illa, who has made it clear that the final agreement will be compatible with the pacts already reached with the Comuns, unions, and employers' associations, has defended a new budget due to the context of global instability, especially in the wake of the US-Israeli war in Iran. This Friday, the Catalan government will convene the political groups to present them with an initial package of measures to address these issues. which it has designed taking into account the response of the State and of Europe.

This idea was emphasized during the question period, where Illa faced criticism from Junts, who accused him of "playing with the country" and staging a "spectacle" that has undermined his credibility. "The Dragon Khan fiasco is back," said Junts leader in Parliament, Mònica Sales, echoing the expression used by former president Artur Mas against the tripartite government. The CUP also questioned the government's ability to provide the "stability" it has promised the country, given the strikes in sectors such as education.

Illa sees "real will" in ERC

From the Catalan Parliament, the Republicans also celebrated the president's decision to allow negotiations to continue. "We appreciate his gesture of withdrawing a budget that he presented without any agreement, stressing the timetable with a countdown that has ultimately complicated everyone's lives," admitted the ERC leader in the chamber, Josep Maria Jové. He stated that the PSC and ERC found themselves trapped in this situation due to the lack of "a clear gesture regarding the transfer of personal income tax," which, like Junqueras, he did not consider an essential condition. In fact, Jové assured that the party would be "flexible" regarding the implementation of the agreements. Addressing the chamber, Illa praised the "genuine willingness" he perceives from the Republicans to continue the talks and bring them to a successful conclusion. "I don't mind withdrawing the budget," he said, explaining that the Catalan government had previously refused to even consider this possibility. In the afternoon, during an appearance at the request of Junts regarding the "collapse" in Catalonia, he acknowledged that he is the first President of the Generalitat in Catalonia to do so, and that he does so with conviction: "I would present them again, and I would withdraw them again," he said. For the Comuns, Jéssica Albiach stated that the withdrawal of the budget "is not good news, but neither is it the worst," and urged updating their agreement with the Catalan Government.

The condition of the Personal Income Tax

What about income tax? In their joint statement, the Socialists and Republicans explicitly state their commitment to "continue promoting negotiations and the necessary legislative changes to implement the investiture agreements," referring to the management of income tax, which the Republicans are demanding in exchange for reaching a budget agreement, although this is not explicitly stated in the statement. ERC has been asking the Spanish government in recent months to move forward with legislative changes—such as the amendment to the Organic Law on the Financing of Autonomous Communities (LOFCA), which the Minister of Finance, María Jesús Montero, rejects—so that the Catalan Tax Agency (ATC) can collect income tax.

"Both political parties are giving ourselves more time to explore solutions within the framework of the signed agreements, which must allow us to preserve the country's stability at this particularly turbulent time," they affirm. Junqueras has assured that they will continue "fighting" to secure income tax revenue, "even if it means not approving a budget." However, he also added that if the Catalan government wants to present an alternative to this issue, they are open to discussing it. "If the Catalan government proposes an alternative, let them propose it, we'll negotiate it," Junqueras stated. In other words, the key is to buy time for the Spanish government to make a concession regarding the personal income tax (IRPF), but if that doesn't happen, ERC would be willing to discuss an alternative that convinces them to negotiate the budget. At this point, however, it remains unclear whether the Republicans will sit down to negotiate the budget in parallel with fulfilling the investiture agreements, which include the IRPF.