Salvador Illa: "We must put a stop to unfair competition and tax dumping in Madrid."

Sant Just DesvernThe President of the Generalitat, Salvador Illa (la Roca del Vallès, 1966), receives the ARA at the Joan Margarit Library in Sant Just Desvern just after arriving from China and before leaving for vacation. He will spend part of this vacation with the Spanish President, Pedro Sánchez.

Can you explain why you are here, in Sant Just Desvern, on August 2nd, having just arrived from China?

— Well, because I just came from a very interesting trip to China, and now, shortly, I will participate in the inauguration of a bus lane on the B-23, which runs from Sant Joan Despí at the entrance to Barcelona, and which will significantly improve transport.

It will now be a year since he took office as president.

— Catalonia is back on track. One of my government's priorities is to generate prosperity and for this prosperity to be shared, and for the Catalan economy to return to the place it has traditionally held and which I believe is its rightful place: leading Spain economically.

But is the goal to surpass Madrid in GDP percentage?

— Yes, there are different metrics, and this is one of them. In a world that is changing a lot, very rapidly, and very rapidly, Catalonia must take advantage of its economic opportunities and return to the forefront of the Spanish economy and become one of the leading regions in Europe. This is our goal.

The Catalan economy is an export-oriented economy. Are you concerned about Donald Trump's tariffs and the conditions the European Union has accepted, that linear 15%?

— No one understands this tariff war unleashed by the Trump administration. I believe in a world governed by multilateral organizations, rules agreed upon by all, and peacefully. The European Union agreement has the advantage of eliminating uncertainty, but I'm not overly enthusiastic about it. In any case, I accept it.

One of the complaints from the business community is that people pay too much tax in Catalonia, and they specifically compare it to Madrid's low-tax policy. What do you say?

— What we need to correct is dumping. Madrid's fiscal reform. I believe that one of the conclusions in Spain in recent years is precisely that sharing the prosperity generated by an economy is not only not a burden, but is an engine of economic growth. That's why it's important to implement strong public policies that help unite society.

We're experiencing record numbers of tourists in Catalonia, with more than 9 million in the first six months of the year. Should we start setting limits?

— Tourism is an important part of our economy, and I think it would be a mistake to abandon it. Now, it's true that it's a sector that must be regulated, and I believe Catalonia has also been a leader in this regard. How is it regulated? First, from a fiscal perspective, we were the first here to introduce a tourist tax, and this year we proposed increasing it. A second very important point is housing. Here, we have enacted legislation that allows each municipality, when it faces a housing crisis, to make decisions regarding the limitation and regulation of tourist housing.

One of the central issues of the legislative session is funding and the investiture agreement with ERC. Do you think it's fulfilling this agreement?

— Yes, and with this question I want to say that we will do it, and we will do it well. I haven't met anyone, anyone, who argues with me that regional financing must be reformed and updated. Catalonia has made a proposal. I would like this proposal to be judged by its content, not by who made it.

In this investiture agreement, it was stated that the IRPF should begin to be collected in 2026, and this week They have postponed it until 2028.

— For the first time, we have a realistic approach, which, therefore, allows us to achieve such an important milestone as the management, in this case, of this tax and all taxes. We must not play games with this issue, nor do we do it hastily and it will not turn out well.

So when they agreed to it, they did play with the calendar, because they set it at 2026.

— We have studied the issue and analyzed it, and to do so with solvency and rigor, and in accordance with the studies we have conducted and the reality we have encountered, this is the way forward.

So you were unaware of the reality of the Catalan Tax Agency when you signed the agreement?

— No, what we've done is, once the Generalitat has set the horizon for all taxes, to manage them as quickly as possible. But I insist, without sacrificing solvency. We're not going to play games on this issue; we'll make realistic proposals, based on our capabilities. We'll take the process as quickly as possible, but with solvency.

So, do you think Catalonia will hold the key to the box in 2028?

— I don't like to speak in those terms. The expression I choose, which I believe is more accurate, and which should be used by the President of the Generalitat, is to carry out comprehensive tax management, with a unique financing system for Catalonia. This is what we have agreed upon and what we will do.

Let me ask you another way: Will personal income tax be collected from Catalonia in 2028?

— The Catalan Tax Agency's horizon is comprehensive tax management. This is what we have agreed upon between governments.

Is this transfer intended to involve Spanish Tax Agency employees joining the Catalan Tax Agency?

— It's an option. But it will surely happen while respecting everyone's working conditions and labor rights.

Would it be equivalent to what happened between the Civil Guard and the Mossos d'Esquadra in its day?

— It's an option that was followed at the time, which I believe responds to a common-sense approach, offering those who want to join the organization the opportunity to do so.

The financing system has two pillars. One is tax collection, and the other is the system itself, which is the distribution of resources. When will we know how much additional resources Catalonia will receive?

— Now, what we've been working on is the criteria and the architecture of this new financing system, also based on accumulated experience. We've opted to respond to the unique characteristics of Catalonia, seeking to respect the ordinal structure and determining what percentages should be included in the tax basket. The next step will be to see what resources are available and start putting numbers to the table. I don't want to put the cart before the horse, and that's up to the Spanish government.

Have the PSOE and the Spanish government adopted the ordinality criterion? Because it was excluded from the bilateral agreement…

— Since 2013, with the Granada Declaration, they've accepted this. And it didn't fall, it seems.

In the preamble. But as a position defended by the Generalitat…

— It's a common-sense concept. No one renounces solidarity contributions, but what cannot happen is that, once the contributions are made, the Generalitat is in a worse relative position than the recipient. I don't think anyone would defend this for their autonomous community.

Have you explained that this criterion, which benefits not only Catalonia but also the Community of Madrid and the Balearic Islands?

— What I'm doing is defending the interests of Catalonia, but I believe the proposal we're making doesn't harm anyone at all. Madrid has a capital status issue that must be taken into consideration when distributing resources. They defend an economic model of unsupportive accumulation of resources. They accumulate, accumulate, accumulate, generating a lot of prosperity, and instead of sharing it, what they do is unsupportive accumulation. And how? With tax cuts, which alter competition between territories, adding to a capital status effect that already favors them and distorts economic reality. If you look closely, the autonomous communities closest to Madrid are losing economic weight. Why? Because they are affected by this way of competing, which is unfair. It's not the model I defend. I defend a just opposite model, one of shared prosperity. We must put a stop to this unfair competition and tax dumping in Madrid.

In the case of Madrid, should this also have any impact on the financing system? In other words, should these resources be limited in some way?

— We'll all figure this out, but I want there to be a basic minimum standard to prevent us from harming each other. And, I insist, I think it's a lot of cheating, on the one hand, lowering taxes for those who have the most, and on the other, cutting public policies. Is this the model of society we want? If we want healthcare that serves everyone, public schools, social benefits like a minimum living income, access to housing, emancipation benefits... This costs a lot of money. How do we pay for it? Well, with taxes. And how do we pay these taxes? In proportion to the wealth and assets each person has. This is our model: Shared prosperity.

Wouldn't it be easier to reach an agreement with the Spanish government if the Minister of Finance were not the candidate for the Andalusian Regional Government?

— No. I know her very well. I was also a vice president of the government, and I shared the cabinet for a year. We worked very well and closely during a very difficult time, which was the pandemic, and she is a very rigorous, very competent person. The solution lies in her, and I think she is making some very interesting contributions and has taken this issue, which is not easy to resolve, very seriously.

Can you provide a timeline for funding?

— We will move as quickly as we can, but we will always act with rigor and certainty. In these twelve months that I have been leading the Generalitat, more progress has been made in regional financing than in recent years.

Do you think there's a relationship to be resolved between Catalonia and the rest of the country?

— The first priority in this matter is the effective enforcement of the amnesty law. I would like to begin the next political year in which all political actors who wish to do so can act without any restrictions. I can understand why some people might have doubts about its effectiveness and its constitutionality. Now I believe these are two arguments that are failing. Because a year and a half later, it can be said forcefully, and I believe with the authority conferred on me as the President of Catalonia, that the law has been positive for Catalonia and for Spain as a whole.

Would you like to have Carles Puigdemont as leader of the opposition in the Parliament?

— I wish he could do whatever he thought was appropriate.

Have you spoken?

— I always keep my private conversations within the scope of my privacy and discretion.

Will you or Pedro Sánchez meet first?

— When I meet, if I meet, I will make it known.

In Parliament, you've clashed with Silvia Orriols and representatives of Vox, but polls tell us the far right is growing. How can you combat this phenomenon?

— From my point of view, the formula is to tell people the truth. Catalonia is not a racist country, and what we must do is dismantle the falsehoods on which these narratives are built. Security is an essential public policy. I, moreover, label myself as progressive. And a second chapter is explaining the economic contribution made by the people who come to Catalonia. I always say that anyone who comes to Catalonia with a desire to generate prosperity and integrate is welcome. And they are Catalan. And remembering that we are talking about human beings, people with sometimes very tragic stories. And the small minority who do not come with these intentions, when we detect that they violate the rules of coexistence, we act with all our might.

Precisely in the ARA we did a dossier in which we explained that there had been a population boom which had caused very rapid growth in many municipalities and there had been problems because this growth had not been planned…

— It's very difficult to plan well in open, dynamic, and highly interconnected economies. It's a challenge we face. It's better to face this challenge than the opposite: that of degrowth and emigration.

Don't the mayors express concern to you?

— Sometimes the rise of the far right isn't so much due to a lack of services but to change itself. These are cities that are changing in terms of their social composition, and I can understand why this has a certain impact on citizens. I want to sincerely acknowledge the mayors who manage this on a daily basis and in specific neighborhoods. Furthermore, I want to say that most of our population has had the experience of having to come to Catalonia to earn a living and remembers what it means to be a migrant. And this also greatly helps us gain a human understanding of the phenomenon.

Have you taken steps to unblock the transfer of immigration powers?

— This is an issue that was agreed upon in the Congress of Deputies, and my political party, the PSC, supports it and all other issues, in any way I can.

Do you think it will be done in this legislature?

— I hope so. I think it's a good agreement. I'd like to see these powers available to us, and I'd like it to happen as soon as possible.

What did you think when the general secretary of Podemos said that they were against that transfer? Why would the Mossos d'Esquadra carry out racist raids?

— These are misleading statements. It's a false argument that demonstrates a lack of understanding of how a democratic police force like the Mossos d'Esquadra operates.

What would be the difference if the Generalitat managed these powers?

— Everything related to the reception and integration of people coming to Catalonia would be done locally, which allows for much better management.

Would there be a difference with the Catalan issue?

— It's important that people who come here understand our way of life and also Catalan. We're putting a lot of resources into it right now.

To what extent are you aware of or sensitive to the issue of the health of the Catalan language?

— For the first time, there's a Language Policy Advisor, and this is a good indicator, at least, of how seriously we take the defense of Catalan. We've made a National Pact for the Language, for Catalan, and I'd like those who haven't joined to eventually join. I think resources should be allocated to promote and encourage people to learn Catalan, and I think constant, methodical, long-term work should be done.

Do you think there's an operation in Madrid by certain branches of the state to overthrow Pedro Sánchez's government?

— I'll say it the other way around. To falsify and consolidate him, there certainly isn't one. I can't say that, but you get the point. There certainly isn't an operation to consolidate Pedro Sánchez's government; we're already seeing that.

But why does this operation exist?

— Because there are people who think it's either they rule or no one else. But this is a democracy. In the end, the citizens expressed themselves at the polls and an investiture was articulated, and Pedro Sánchez is doing a magnificent job under very adverse conditions, also from a geopolitical perspective.

José María Aznar threatened Sánchez with jail. Do you think there's a sector of the state that would like to see Sánchez imprisoned?

— Look, I don't like threats, but they don't scare me, and instead of threatening this man, what he should do is give explanations, for example, about the Montoro case.

Do you think Sánchez should stay in office until the end of the term?

— I've said it publicly. Pedro Sánchez has done a remarkable job. When I see that he's the only leader with the political courage and sincerity to tell NATO that 5% of GDP cannot be allocated to defense, I feel proud.

Can Sánchez govern without a budget?

— It's being done. And many of those now tearing their clothes have done so.

And you?

— I'm working to ensure there are budgets for next year. We've begun the process of drafting them. Regarding the Spanish government, I will support it in whatever it does. What I want, to be very clear, is for Mr. Pedro Sánchez to remain the president of Spain, as long as the citizens decide it should be him, as has been the case. It's the government that best suits him in Catalonia and in Spain.

If Feijóo takes office, what will Salvador Isla be like as president?

— Feijóo will not reach Moncloa.