The financing agreement is in place: next step, budgets?

BarcelonaSince returning to lead Esquerra Republicana, Oriol Junqueras has repeatedly insisted that he will not negotiate new agreements with the Socialists until the commitments already signed in Catalonia and Madrid are fulfilled. This left Salvador Illa's government without any possibility of passing a budget in its first year in office, when the Republicans walked away and forced it to govern with the 2023 budget, albeit with an extra €4 billion in supplementary credits. Now, however, the scenario has changed: the announcement of the new regional financing model, the launch this Monday of the mixed commuter rail company and the steps forward towards a new governance of the airport system Catalans are clearing the way to begin talks on a budget that the Catalan government has been preparing for weeks, together with economic and social stakeholders. "We have done the work, we have kept our word, and we have honored the signed agreements," Illa stated. in the hearing to assess the new funding. However, if the Catalan government intends to have a budget in place in the first months of the year to avoid jeopardizing its implementation prospects, negotiations with ERC and Comuns will have to be a race against time. And, for now, both parties are downplaying the start of talks.

From the Republican headquarters on Calàbria Street, they point out that there is another issue, tax revenue, pending specific "timeline" details. Without progress on this front, Republican sources emphasize, they will not sit down to negotiate the budget. As a way to exert pressure, but also to offer a fast track to unblock the process, ERC will revive its proposed law in Congress in February for Catalonia to assume the management of personal income tax, a commitment that The Catalan government maintains that the Catalan Treasury could assume this in 2028.But not at the moment. "Work has been done to achieve it. There should be news in January," say sources from ERC. If the PSOE wanted to separate one issue from the other and announce only the financing agreement, they interpret, "it was probably to avoid having two fires at once."

In the Catalan Government, however, they emphasize that the agreement with ERC was to begin discussing figures once the new financing was announced, a condition that has now been met. "I hope we can open these negotiations soon," said the Minister of Economy, Alícia Romero, in an interview with ARA. The executive wants to increase investment allocations and projects an expansionary budget, although the containment target set by the Generalitat to correct the non-compliance with the spending rule which it incurred in 2024. Neither a tax cut nor a massive increase is on the table. The Ministry of Economy is open to "adjustments," for example, with some tax breaks for family businesses, just as last year a reduction in income tax was approved for lower earners. or more taxes on large property owners. The situation is more complicated for Sánchez, who doesn't have enough votes from Esquerra to pass the budget and, moreover, currently lacks the support (or the willingness to negotiate) of Junts or Podemos.

Comuns, waiting

In Catalonia, ERC's moves are being closely watched by Comuns, who know that the Republicans' timing with the Socialists is influencing the talks. However, the Comuns party isn't ruling out starting negotiations with the PSC-led government before ERC decides to do so. In any case, while awaiting a call from the Ministry of Economy, Jéssica Albiach's group warns that they will not negotiate until the government fulfills its outstanding commitments, two of which stand out: implementing the Catalan, English, and math tutoring programs – the Education Ministry is still working on hiring staff – and finally resolving the housing issues, which have been stalled for months. "It's going too slowly," lament sources within the parliamentary group, while the Ministry of Territory emphasizes that these are processes that must be resolved while respecting all due process guarantees. The register of large property owners is also pending approval, although sources in the Commons are confident that it will be approved once the new public consultation period ends, following the latest changes introduced in the decree containing the details for complying with data protection regulations. as explained by AHORA.

Housing has been, until now, the banner that Comuns has raised in its negotiations with the Government, with whom they maintain a working group on what has been their latest flagship proposal: prohibit speculative housing purchases through urban planning legislationThis is the exclusive responsibility of the Generalitat (Catalan government). This issue, which Barcelona en Comú already raised with Mayor Jaume Collboni during the failed negotiations for Barcelona's budget, could also be a topic of discussion in the new talks with the Catalan government. Comuns expects to have the first conclusions from these discussions by the end of January.