The Government includes the salary increase for civil servants in a €6 billion credit expansion

BarcelonaSecond move by Salvador Illa's government within the framework of the new plan to try to have a budget in 2026. After This Wednesday he will withdraw the accountsFacing defeat in the Catalan Parliament and hoping to salvage negotiations with the ERC (Republican Left of Catalonia), the government approved a €5,988.65 million supplementary budget on Thursday morning to provide "breathing room" and "guarantee the functioning" of public services and buy "more time" to get talks with the Republicans back on track. This funding will be primarily allocated to increasing public sector salaries—including the agreed-upon raises for teachers and the Mossos d'Esquadra (Catalan police)—but also to commitments in areas such as long-term care, public transportation, and local government.

This was explained by the Minister of Economy, Alícia Romero, at a press conference in the Palau de la Generalitat, after an extraordinary executive council meeting approved the expansion of the current budget, which has been in effect since 2023. "If we didn't have a budget in April, we needed a supplementary appropriation to meet the Generalitat's obligations, commitments, and the normal functioning of the institution," she argued. She added that, in parallel with the supplementary appropriation, a second decree-law will be approved next Tuesday with the "most urgent" measures that were incorporated into the draft budget law, especially those related to "simplification, urban planning, and housing."

Regarding the supplementary appropriation, Romero highlighted that the "largest portion," up to 3.43 billion euros, will be allocated to public sector employees. He argued that, without the supplement, "civil servants' salaries were at risk" and that, with the decree approved this Thursday, it will be possible to cover the salary increases corresponding to the years 2024, 2025, and 2026, as well as the staff increases of recent years. This allocation will also serve to fulfill the agreements for salary increases reached with the CCOO and UGT unions for teachers—which It faces rejection from the major unions Ustec and Secondary School Teachers – and the agreed with the Mossos unions.

The budget increase, which must be approved by Parliament, will also include funds to cover increased spending by departments in areas such as pharmaceuticals, long-term care, rental assistance, and resources for equal opportunities in schools. Furthermore, it will serve to fulfill multi-year commitments of the Catalan Government, such as public transport subsidies, the social housing purchase plan, and the implementation of the Neighborhood Plan. It will also mobilize resources to mitigate the impact of the war in Iran, which are still pending approval. Romero stated that the nearly €6 billion extra increase expands the current budget, but clarified that it does not represent "all the resources" the executive would like—the budget presented a few weeks ago, and now withdrawn, included a €9.1 billion increase in spending compared to 2023. Thus, planned increases in resources for the Tax Agency, among others, are excluded. "We can't do anything new," Romero explained. And that is why, after ruling out a second increase in the budget – “we have reached the maximum,” he said – he called on ERC to honor the agreement and negotiate the budget. “There is nothing more important for the stability of a country than having a budget,” he insisted.

Junqueras demands an “alternative” to the personal income tax

The withdrawal of the bill, which will reach the Catalan Parliament this Friday, was a gesture from President Salvador Illa towards the Republicans. But Oriol Junqueras's party has also shifted its position and no longer considers the transfer of the Personal Income Tax (IRPF) a prerequisite for negotiations. "It's a very important condition," Oriol Junqueras simply stated this Wednesday. "The IRPF is a red, green, and blue line, and defending its revenue is good for Catalonia. Let the PSC convince the PSOE, and if not, let them propose an alternative," he reiterated in an interview on TV3 this Thursday. He did not, however, specify what this alternative might be. "If it can't be done now, then in two days, and if there's an alternative, let's study it, but the PSOE doesn't want to budge," he simply said.

At a breakfast briefing in Madrid, the Spanish Vice President and Minister of Finance, María Jesús Montero, reiterated that "there is no agreement" on the IRPF. "I am confident that, through much dialogue and hard work, we can reach an agreement," he added, making it clear that everything related to the collection of the tax "from all" the autonomous communities will be done "transparently and with full transparency." "It's not about doing it sooner or later, it's about doing it right and correctly," he concluded. Junqueras, who described Illa's withdrawal of the budget proposal as a "victory for Catalonia," defended the need for the supplementary credit to "compensate for the increase in prices." The Republican explained that the expansion was agreed upon with Esquerra Republicana and, therefore, it is assumed that it will be approved in the Catalan Parliament with the support of the Comuns as well. The Catalan government remains confident that the Republicans will approve the 2026 budget before the summer. "ERC has opened up to intensive negotiations before the end of the parliamentary session, before July. We trust ERC and hope to get to work as soon as possible," said the minister. Romero emphasized that the objectives of Junqueras' party and those of the Catalan government "are very similar" and promised "flexibility" to "incorporate as much as possible" their "priorities" in "everything that falls under the Generalitat's jurisdiction." "We will work on what we have the capacity to influence," she said.