The Government approves a budget of almost 50 billion euros without the support of ERC

BarcelonaDespite lacking the guaranteed support of ERC, the Catalan government has maintained its initial plan and approved the 2026 budget bill this morning. These will be the first budgets presented by Salvador Illa's government, totaling nearly €50 billion, representing a €9.1 billion increase in spending compared to the 2023 figures, the last approved budget. The budget was validated in an extraordinary executive council meeting this morning, and subsequently, the Minister of Economy, Alícia Romero, delivered it to the Speaker of Parliament, Josep Rull. "These are ambitious budgets," stated Romero, who emphasized that the objective is to implement public policies to "generate prosperity." In addition to the overall budget of nearly €50 billion, the Minister of Economy highlighted that the government will allocate approximately €10 billion to the knowledge and business sectors to "generate wealth." Furthermore, she explained that 74% of the budget will be allocated to strengthening the welfare state and, therefore, to areas such as education, healthcare, and housing, where the Government will contribute €1.9 billion, a "record figure," Romero said. While awaiting details on how this budget will be broken down, the Minister of Economy also specified that the accounts will include €4.146 billion in investment, "the highest figure in recent years," Romero explained, with the aim of "addressing shortcomings" in the education and healthcare sectors, as well as in transportation infrastructure. "These are bold budgets that aim to provide solutions, not create problems," Romero asserted. For now, the Government has only secured the support of the Comuns party, with whom they announced an agreement last week. However, Esquerra decided this weekend that it would not sit down to negotiate the budget because it sees no "guarantees" that the Spanish government is willing to release the personal income tax (IRPF) revenue. "We hope that during the legislative process we can garner the necessary support to make the budget a reality as soon as possible," Romero stated. "It's time to rise to the occasion. For what matters. For Catalonia," added the President of the Generalitat, Salvador Illa, in a tweet.

ERC's refusal

The budget proposals are now in Parliament and will begin their legislative process. What timeline is on the table? The Speaker's Committee and the Board of Spokespersons are scheduled to set the exact dates this morning, but the Socialists and Republicans agreed this Thursday to extend the deadlines for submitting amendments to allow more time for negotiations, which resumed this week after ERC's "no" vote over the weekend. Thus, the plenary session where the debate on the entire budget is to take place will not be the week of March 9th, but is now scheduled for March 18th, a week later. This extends the deadline for submitting amendments to the entire budget to 20 days, while the deadline for submitting amendments to specific articles will be 30 days.

ERC is currently maintaining its veto on negotiations The accounts and is determined to present a comprehensive amendment if negotiations in the coming days do not progress, which would doom the figures to failure. The Republicans continue to demand a gesture from the Spanish government that gives them guarantees that they are willing to cede the power to collect personal income tax in Catalonia. And in this timeline, there is a meeting that could be key: that of the Fiscal and Financial Policy Council (CPFF) scheduled for the beginning of March. This is where the Vice President and Minister of Finance, María Jesús Montero, should present the legislative changes to implement the new financing model. ERC hopes that she will also make a gesture regarding personal income tax.

The scenario of the budget extension

Should the disagreement materialize, all of this could lead to another budget extension. According to sources at the Ministry of Economy, and as The ARA advanced this weekThere are approximately 1.5 billion euros at risk. These are the funds earmarked for new projects that would be excluded from the extension.

All this, while The Catalan fiscal deficit remains above 21 billion eurosAs reported by ARA on Thursday, Catalonia contributed €77.742 billion to the state coffers in 2022 (19.3% of the total for all autonomous communities) and received €56.650 billion (14% of the total). This means the Catalan fiscal deficit was €21.092 billion. These figures come from the latest fiscal balances calculated by the Generalitat (Catalan government), which will be made public this Friday as soon as the government approves the draft budget for 2026. Catalonia's fiscal deficit stood at 8.2% of GDP, roughly in line with the average since 1986 (8.1%). Each Catalan, therefore, contributed €2,670 more than they received.