Budgets grow by 10% and allocate 1.9 billion to housing

BarcelonaWithout the support of the ERC (Republican Left of Catalonia), the Catalan government has maintained its initial plan and approved the 2026 budget bill this Friday morning. This will be the first budget presented by Salvador Illa's government and will reach almost €50 billion; specifically, the figure is €49.162 billion, an increase of 22.8% compared to the 2023 budget—that is, €9.126 billion—the last one approved by the Generalitat (Catalan government) under Pere Aragonès's administration. Compared to last year's Generalitat spending, under the extended budget, the increase was 10.3%. The budget includes €4.146 billion in investments, the "highest" figure in recent years, according to the Minister of Economy, Alícia Romero. An extraordinary executive council met this morning to approve the accounts, and Romero subsequently handed them over to the president of the Parliament, Josep Rull.

"These are ambitious budgets," Romero stated, emphasizing that the goal is to implement public policies to "generate prosperity and share it." The increase in spending is due to growth in non-financial revenues, which have risen to €48.231 billion. In total, the overall budget, including the public sector, reaches €54.747 billion, representing a 24% increase compared to the budget approved in 2023.

74% for social spending

Of the total budget of almost €50 billion, the Minister of Economy highlighted that 74% will be allocated to strengthening the welfare state. Therefore, the majority of resources are concentrated in areas such as education, healthcare, and housing, where the Catalan Government will contribute €1.9 billion, a "record figure," Romero stated. This figure is partly due to the agreement with the Comuns party, with whom they secured over €1.2 billion for these policies. The Catalan Government has added two lines of funding, €600 million and €50 million, from the Catalan Finance Institute (ICF) for building rehabilitation. The executive branch also includes further housing measures in the budget's accompanying legislation, such as a "strengthening" of the Catalan Consumer Agency's sanctions regime. This legislation also includes measures related to... public administration reform.

The budgets for Health (€11.412 billion) and Education (€6.713 billion) remain the highest. The Catalan Government has budgeted, for example, for improvements to hospitals such as the Clínic in Barcelona, ​​as well as investments in around twenty new schools. Romero also highlighted that the Government will allocate approximately €10 billion to the knowledge and business sectors to "generate wealth."

In addition to the budgets, the Catalan Government also released the fiscal balances this Friday: The Catalan fiscal deficit remains above 21 billion eurosAs ARA reported on Thursday, Catalonia contributed €77.742 billion to the state coffers in 2022 (19.3% of the total for all autonomous communities) and ended up receiving €56.650 billion (14% of the total). For now, the Catalan government only has the support of the Comuns, with whom it announced an agreement last week. Esquerra Republicana de Catalunya (ERC), on the other hand, has decided not to sit down to negotiate the budget because it sees no "guarantees" that the Spanish government is willing to unblock the collection of personal income tax (IRPF). "It's time to rise to the occasion. For what matters. For Catalonia," added the President of the Generalitat, Salvador Illa, in a tweet. The Catalan government, in fact, is confident that it will have a budget, and Romero has assured that there is "sufficient room" in this budget to incorporate the requests made by ERC if negotiations begin.

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 was to take place will not be on March 11, but is now scheduled for March 20, a week later. Consequently, the deadline for submitting amendments to the entire budget is extended to March 19. The final debate would then be on April 24.

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 budget to failure. The Republicans continue to demand a gesture from the Spanish government that guarantees they are willing to cede the power to collect personal income tax (IRPF) in Catalonia. And on this timeline, there is a potentially key meeting: that of the Fiscal and Financial Policy Council (CPFF), scheduled for early March. This is where the Vice President and Minister of Finance, María Jesús Montero, is expected to present the legislative changes to implement the new financing model. ERC hopes she will also make a gesture regarding personal income tax.

"We have to be attentive and receptive to what ERC is asking for to have the guarantees that this will move forward and to respond to their demands," Romero argued. However, he has left the legislative changes needed to convince ERC in the hands of the Spanish government. The Minister of Economy has been forthcoming in defending the €32 million increase added to the budget to cover 200 permanent positions for the Catalan Tax Agency (ATC) and create 450 temporary positions, as well as funding the "technological transformation." This week, in fact, Romero explained that 25 permanent positions for tax inspectors have been created.

The scenario of supplementary credits

Should the disagreement materialize, all of this could lead to another budget extension. According to sources at the Ministry of Economy, as ARA made progress this weekThere are approximately 1.5 billion euros at stake. While the Catalan government awaits ERC's approval, the PP and Vox have already announced they will present a comprehensive amendment. The CUP will decide after studying the budget items, although they also promise a "responsible battle" against a budget they believe falls short of the country's needs. Junts has not yet clarified whether it will present a return amendment, but has made it clear that it will not enter into negotiations for a budget it sees as "marked by the extreme position of Comuns" and which it considers "propaganda," given the lack of guaranteed support. For their part, Comuns have reiterated their hope that the Catalan government and ERC can reach an agreement to approve the budget. However, they also declined to comment on whether Salvador Illa should call early elections: "We don't anticipate scenarios," said spokesperson David Cid, reports [reported]. Martina Alcobendas.