The Spanish government is demanding that ERC abandon "extreme positions" in the personal income tax negotiations

BarcelonaOn the day the Catalan government presents its budget without the support of the Republican Left of Catalonia (ERC), which for now dooms it to failure, the Spanish government is already warning that it will be difficult to concede to the demands of the Republicans. The Vice President and Minister of Finance, María Jesús Montero, reiterated in an interview this morning on SER radio that there is currently no agreement on income tax revenue—a condition sine qua non from Oriol Junqueras's group to negotiate the Catalan accounts—and has demanded that Esquerra abandon "extreme positions" which, in his opinion, only serve to "distance" understanding.

The transfer of authority to the Catalan Tax Agency (ATC) to collect 100% of personal income tax (IRPF) is one of the agreements signed by the Socialists and Republicans for the investiture of Salvador Illa, and which the PSOE's Federal Committee endorsed. However, the Spanish government is resisting unblocking this issue and incorporating it into the amendment to the LOFCA (Organic Law on the Financing of the Autonomous Communities), which the Socialists must introduce in Congress to provide legal backing for the new financing model. In this regard, the ERC spokesperson, Isaac Albert, responded to Montero's remarks and demanded that she bring the agreement from the last meeting of the Bilateral Commission on Financing to the Fiscal and Financial Policy Council (CPFF), scheduled for March. The text signed by the State and the Generalitat (Catalan government) stipulated making the necessary legislative changes for Catalonia to assume "powers" in the management of personal income tax. "Modifications can be made to move forward so that communities can collect taxes," ERC's deputy communications secretary, Isaac Albert, told SER Catalunya. The Republican leader believes it will be "The litmus test" and "a clear first step" is Montero's commitment.

The investment consortium

Almost simultaneously with these statements, ERC registered in Congress the law regulating the Catalan Investment Consortium, the new State-Generalitat body that will manage state investments in Catalonia. This body, also agreed upon with the Catalan Government for the investiture of Salvador Illa, seeks to "put an end to the structural deficits accumulated over decades," according to the Republicans, who emphasize the timeliness of the initiative amidst the fallout from the Rodalies commuter rail debacle and infrastructure projects like the AP-7 highway. In fact, this consortium had been stalled for months: the Catalan Government and ERC had agreed on the statutes that would govern the new body, but they had not received the endorsement of the PSOE (Spanish Socialist Workers' Party). This body began to move forward in recent weeks and was intended to unlock negotiations between the Socialists and Republicans so they could begin discussing the budget, although ERC maintained that it did not replace the condition they had set for collecting personal income tax. The text presented in the Spanish lower house establishes that the new consortium will be jointly owned, meaning it will have equal participation from the State and the Generalitat (Catalan government), and will be responsible for developing a multi-year investment plan, monitoring and controlling its implementation, coordinating state-owned investing entities, and implementing corrective measures when deadlines or levels of execution are not as agreed. The law also provides for the creation of a Catalan Investment Company, again jointly owned by both administrations, for drafting projects and carrying out works. With this structure, ERC argues that "it will be possible to overcome the administrative slowness and lack of agility that have plagued strategic projects pending for years." In other words, on the one hand there will be the consortium, which will be the body that sets and plans the political direction of the investments, and on the other hand, the commercial company, which will be responsible for executing them. The registered regulation sets a maximum period of nine months to establish the consortium: it should begin operations on January 1, 2027. As for the commercial company, twelve months are set for its creation. According to Esquerra, the financing of all of this will be assumed "entirely" by the State.