The Ministry of Public Works' rejection of the funding further strains relations with the Government

Barcelona / MadridRelations between Foment del Treball and the PSC government are not at their best. While the employers' association and the Catalan socialists enjoyed a honeymoon period while Salvador Illa was in opposition, things began to change when the PSC leader came to power in Catalonia and, contrary to the demands of Catalan business leaders, began to pursue interventionist policies.for example, in housing—and rejected major tax cuts. The clash, however, reached its peak this Friday, with the announcement of the proposal for the new financing model The agreement was negotiated three-way between the Catalan government, the ERC (Republican Left of Catalonia), and the Ministry of Finance. The Catalan executive had convened economic and social stakeholders at the Palau de la Generalitat (the seat of the Catalan government) to explain the details, but the Ministry of Public Works (Foment) preempted them: in a statement, it labeled the proposal "clearly insufficient" and asserted that it did not resolve Catalonia's funding problem. This generated considerable unease within the Palau de la Generalitat and also among the president, Salvador Illa. Tensions erupted at the meeting, chaired by Illa, which was also attended by representatives from the unions, Pimec (the Catalan Association of Small and Medium-Sized Enterprises), FemCat (the Catalan Federation of Municipalities), and the Barcelona Chamber of Commerce. Sources from both sides confirm that on Friday, Illa personally called Sánchez Llibre to invite him to a meeting. In this call, the president conveyed to the leader of the Catalan business community the significant discomfort that Foment's statement had caused within the Catalan government. Sources close to the employers' association explained to ARA that the position outlined in the statement was not approved by its board, something that has "surprised" some of its members. However, these same sources added that the assessment expressed by Sánchez Llibre is largely shared among the members. In fact, while it is true that Sánchez Llibre himself later acknowledged to the board that the statement could have been published later, the content would have been the same, according to various business sources consulted by ARA, who argue that the Ministry of Public Works has been "consistent" with its long-standing position. They cite, for example, the annual report they publish on the historical underfunding of infrastructure and insist that many details of the current proposal remain unknown. They also emphasize the "ambiguous" stance taken by the other Catalan employers' associations upon learning of the new model.

In any case, it cannot be said that the situation has caused a rupture between the Catalan Government and Foment, and even less so between Illa and Sánchez Llibre, who are known to be on good terms. "They have a great deal of personal respect for each other," says a source close to the business leaders, who assures that these past few days "proper decorum has not been lost." Now the business leaders want to let time pass and for things to calm down. "The situation is unpleasant, but it will be resolved," the same source indicates. At Friday's meeting at the Palau de la Generalitat, Illa and the president of Foment did not see each other because David Tornos, its secretary general, attended on behalf of the Catalan employers' association. No meeting with Foment is planned, neither this week nor in the coming weeks, sources from the Presidency add.

Dardo de Romero

Aware of the difficulty of passing legislation in Congress, where the votes of Junts are not guaranteed, the Catalan government is working hard to defend the merits of the new agreement, which allows Catalonia to increase its funding from the regional financing system by €4.7 billion. The fact that the Ministry of Public Works (Fomento) is not publicly involved with the supporting parties weakens the pressure strategy on Junts, with whom the Catalan employers' association has been reconnecting in recent months. These contacts were key, for example, in Junts's successful blocking of the reform to reduce working hours. In any case, the Catalan employers' association has repeatedly urged the Catalan government to reach out to Junts—as has the Círculo de Economía (Circle of Economy). In fact, Sánchez Llibre, in his New Year's address, asked Isla to finally abandon his alliances with what he defined as "the radical left." Publicly, the Government refuses to engage in disputes and remains silent on whether it will make any gesture to rectify the situation. "We respect all positions and demonstrations that may be made. We want to emphasize that the majority of economic and social actors are in favor of the model," the Government spokesperson and Minister of Territory, Silvia Paneque, stated on Tuesday. However, in an interview this Monday on Catalunya Ràdio, Romero did take a swipe at the Catalan employers' association: "They will know what this is about, but in any case, if I were a Fomento company, I would obviously demand explanations." Those within the Socialist ranks believe that Carles Puigdemont's party is behind Sánchez Llibre's stance. The relationship with Junts

The close relationship between Foment and Junts on economic matters is no secret, especially regarding key votes in the Congress of Deputies that affect business interests. Sánchez Llibre himself has cultivated his relationship with former president Carles Puigdemont: he has visited him frequently in Waterloo since before Junts became a key player in the Congress. In fact, it was the first employers' association to pose for a public photo since 2017 during the campaign for the last Catalan elections. The former president's right-hand man in the party, Albert Batet, also has a direct line to the leader of the employers' association: in addition to the vote on reducing working hours, Junts also played a key role in the elimination of the energy tax.

Now, has this influenced Josep Sánchez Llibre's stance on funding? Sources within the Catalan Parliament say no, that in this case they agree that the pact between Esquerra Republicana (ERC) and the Socialist Party (PSOE) is insufficient for Catalonia, but they maintain that there was no collusion in the statement that has generated unease within the Catalan Government.

"The Ministry of Public Works (Fomento) says what it thinks; it's independent," points out one of the sources consulted, adding that it is a private entity that expresses its opinion. In fact, the same sources recall that Sánchez Llibre has a track record that supports this view: he himself was the spokesperson for the Convergence and Union (CiU) coalition in Congress when, in 2009, Esquerra Republicana also reached an agreement with the Socialists on the latest funding model (during the tripartite coalition government), and the nationalist federation opposed it.

Along the same lines, business sources also reject the notion that Fomento is "the armed wing" of Junts, as Romero has implicitly suggested, and even less so in the case of financing. These same sources believe that the reaction of the Catalan government and Salvador Illa is also a result of "nervousness" at not having a budget in Catalonia: "This nervousness cannot be transferred to a private actor [...]. We must understand the role that each one plays," they conclude.