Salvador Illa withdraws the budget proposal to save negotiations with ERC.

BarcelonaSalvador Illa decided to play it safe 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 budget was headed for failure this Friday, because Esquerra maintained it would vote for its amendment in its entirety, thus defeating the bill. But to avoid a parliamentary defeat, Salvador Illa decided to withdraw the budget this Wednesday, as some sources consulted by ARA indicated this Tuesday, and give negotiations with the Republicans another chance. Both parties have committed to having a budget 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 will convene an extraordinary executive council meeting this Thursday to approve a single supplementary credit that will "guarantee the functioning of public services" while talks with the Republicans continue. "We have reached an agreement to provide Catalonia with a new budget," said the head of the Catalan government. The agreement was reached after several meetings in recent hours. In fact, Salvador Illa and Oriol Junqueras, who is also scheduled to appear before the media this morning, met until late Tuesday. In a joint statement, the Catalan Socialist Party (PSC) and the Republican Left of Catalonia (ERC) argued that it is necessary to provide Catalonia with a new budget to "continue driving the country forward, to protect public services, and to implement the investiture agreements." These new budgets will have to be negotiated in the coming months to be approved "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 Catalan left-wing coalition, unions, and employers' associations, framed the decision to exhaust all budget options within the context of global instability, especially in the wake of the US-Israeli war in Iran. A "risky" scenario, he said, that "obliges us to be prepared and united." "Catalonia must be prepared to face any scenario," he added, insisting that this requires "stability" and "responsibility." In the statement from the Catalan Socialist Party (PSC) and the Republican Left of Catalonia (ERC), in fact, it is emphasized that the budget "must internalize the economic impacts of the current international situation, incorporating policies that help build a social safety net to protect the most affected sectors." "We cannot afford to jeopardize the social safety net that families, workers, and businesses need," Illa said.

Personal Income Tax Revenue

At the same time, the Socialists and Republicans explicitly stated their commitment to "continue promoting negotiations and the necessary legislative changes to implement the investiture agreements," in a clear reference to the management of personal income tax (IRPF), which the Republicans are demanding as a condition for reaching a budget agreement, although this is not explicitly stated in the press release. ERC has been demanding in recent months that the Spanish government implement the necessary legislative changes so that the Catalan Tax Agency (ATC) can collect IRPF. One of these changes involved modifying the Organic Law on the Financing of the Autonomous Communities (LOFCA), which the Minister of Finance, María Jesús Montero, rejects. "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," the parties now stated.

With the withdrawal of the budget proposal, the Catalan government's objective is for Esquerra Republicana (ERC) to commit to negotiating and approving the budget in June. This is a scenario the Republicans themselves opened the door to just a few days ago. "Perhaps we won't have a budget in April, but if Illa keeps his word, we can have it in June. They can resubmit it if it fails in April," said ERC's general secretary, Elisenda Alamany, in an interview with RTVE a few days ago. In fact, Oriol Junqueras' party had criticized the Catalan government for presenting the budget without having its support guaranteed. However, ERC continues to demand a gesture from the Spanish government to try to unblock the collection of personal income tax (IRPF).