The International Monetary Fund (IMF) calls on governments to implement "temporary" policies to protect their economies from the energy shock caused by the war in Iran, with special emphasis on protecting the most "vulnerable" segments of the population, according to the April report of Fiscal Monitor, which the economic body publishes semi-annually. In the study, the IMF warns that some countries —such as many members of the European Union, China, or the United States, among others— have limited room to maneuver to carry out public policies to support the economy due to the high levels of public debt they have accumulated in recent years and low growth levels.

The State closed 2025 with the lowest public deficit since the outbreak of the financial crisis of 2008, thanks to a new historic record in tax collection, as reported this Tuesday by the Ministry of Finance.

A well-known economist assured me this week that there would be a Catalan government budget for 2026. He was very convinced. In fact, he had no doubt whatsoever, after applying game theory, a branch of mathematics used to model situations involving negotiation, conflict, competition, cooperation, and other similar interactions. This theory aims to determine the best possible strategy for each player and the expected outcome of each situation. Games can be zero-sum (the gains or losses of some players are offset by the gains or losses of others) or non-zero-sum, meaning everyone can win or lose.

The Catalan government needs a budget to function properly. Currently, it is still operating under the extended 2023 budget, which severely limits the administration's room for maneuver and leaves it short of approximately €1.5 billion. This amount remains unused because new expenses or projects cannot be included due to the lack of a budget. This sum is equivalent to the annual allocation of departments such as the Department of Business and Labor or the Department of Universities and Research. The truth is, citizens deserve a government that operates with a budget that reflects the country's current needs, not figures that were based on the reality of three years ago. Furthermore, having a budget would allow the government to make the most of the resources generated by record tax revenues thanks to economic growth. This includes both taxes in which Catalonia participates, such as personal income tax (IRPF), and those collected directly and transferred to the government (inheritance and property transfer taxes) under the current financing system.

One of the advantages of the financing model agreed upon between the Spanish government and ERC (Republican Left of Catalonia) is related to management. Specifically, it eliminates advance payments for those autonomous communities that choose to do so. This means they would receive their revenue in real time instead of through advances, with a final settlement made after two years. Currently, the autonomous communities receive 98% of their funds through advances estimated by the central government, and the remainder after two years. In the final settlement, the autonomous communities may either receive more funds or have to return them, depending on whether the estimates were too optimistic or too pessimistic. For 2025, the settlement was based on the 2023 revenue figures.

Catalonia continues to receive a third of all the funds the central government has allocated to the autonomous communities since 2012 through extraordinary mechanisms such as the Regional Liquidity Fund (FLA). According to data from the Ministry of Finance, from that year until the allocation for the first quarter of 2026, the total amount for Catalonia, through various extraordinary instruments, has reached €160,722.3 million. This represents 32.8% of the more than €488 billion allocated to the territories under the common regime, which are used to cover the deficit and pay outstanding bills and debts. However, the ranking changes when the estimate is calculated in euros per capita. In this case, the Valencian Community leads the way, with €22,461 per person, given the increase in resources received by this autonomous community to mitigate the effects of the October 2024 storm, compared to €19,676.4 in Catalonia. Two issues currently on the table, agreed upon between the Spanish government and the ERC (Republican Left of Catalonia), directly affect regional finances, despite the polarization and difficulties in securing parliamentary support. One is the forgiveness of approximately €17 billion of Catalonia's FLA (Regional Liquidity Fund) debt, out of a total of more than €83 billion for all the autonomous communities, representing around 24% of the current regional debt. This was approved by the Council of Ministers and is pending ratification by the Congress of Deputies. The other essential element is the new financing model, which faces the challenge of providing specific provisions for Catalonia, but also for the other regions. The upcoming meeting scheduled for this Thursday between the Spanish Prime Minister, Pedro Sánchez, and the leader of Esquerra Republicana, Oriol Junqueras, must implement it and address issues such as maintaining the principle of ordinality; that is, ensuring that once resources are contributed to the common fund, Catalonia does not fall too far behind other territories. According to the settlements of the current financing model, which expired in 2014, Catalonia is the third largest contributor to the system, behind Madrid and the Balearic Islands, but it falls to tenth place when the distribution is based on state spending and investment, and drops even further when the price differential is taken into account.

"Catalonia's contribution will be made through a percentage of taxes. We won't keep all the taxes for ourselves." This is how Maite Vilalta, professor of public economics at the University of Barcelona (UB), described the main difference between the proposal for singular financing for Catalonia agreed between the PSC and ERC and the concert model that the Basque Country and Navarre have. Vilalta, who is a member of the group of experts appointed by the Generalitat to design the new model, reiterated that the agreed proposal is very different from the models of the two autonomous communities.

No sooner said than done. The Spanish government has accelerated its efforts to finalize its state budget for next year and end the extension of the 2023 budget. Official State Gazette The Spanish Official State Gazette (BOE) published this Wednesday the general guidelines and criteria for these accounts, which Prime Minister Pedro Sánchez stated he would present during an interview on TVE1 on Monday.

The Catalan Tax Agency (ATC) has discovered €295 million in tax fraud in 2024, a 3.15% increase over the previous year. This figure, together with that for 2023, raises the amount defrauded in the last two years to €581 million, well above the fraud detected in the first two years of the previous plans, which began in 2015 and 2019. In the last decade, the ATC has uncovered a total of 2.

Nearly 3 out of every 10 euros that the State has allocated to the autonomous regions since 2012 through mechanisms such as the regional liquidity fund (FLA) have gone to Catalonia. According to data from the Ministry of Finance, since that year to date, 145.365 billion euros have reached Catalonia through various extraordinary instruments, out of a total of 431.289 billion euros allocated to the territories under the common regime, which cover the deficit and pay bills and ten.

The Independent Authority for Fiscal Responsibility (AIREF, the state agency that oversees public accounts) has lowered its growth forecasts for the Spanish economy for this year and next due to international uncertainty. In response, it has stated that the State will have to take measures starting in 2027 to comply with the fiscal commitments required by European regulations.

The Catalan government is seeking private financing alternatives and reducing its dependence on the regional liquidity fund (FLA) offered by the state, Economy Minister Alícia Romero explained this Friday. The Catalan government hopes to be able to issue debt to the markets soon, as well as refinance part of its debt directly with banks in order to lower the interest it currently pays.

Catalan politics has a significant capacity for innovation. ERC leader Oriol Junqueras has already said he doesn't intend to support the 2025 budget, and we'll see if he will do so for the 2026 budget. But don't worry. A good example is the agreement between Salvador Illa's government, specifically with the Republicans and the Comuns, which guarantees another €2 billion for its operations without any new budgets.

In an opinion piece published this Thursday, the Círculo de Economía (Economic Circle) advocated a reform of the regional financing system similar to that existing in "federal" countries such as the United States and Canada, and has moved away from implementing in Catalonia a model like the regional agreements already in place in Navarre and the Basque Country.

After months of public and private pressure, the Catalan government has obtained a flexibilisation of regional governments' reference deficit rate for 2023. As ARA has been able to confirm with sources from the Spanish and Catalan executives, this limit, which was to be 0.1% in 2023, will finally be 0.3% of GDP. All regions will benefit, and in the case of Catalonia this means around €500m (some sources in the Generalitat say €470m, while others put it at €525m).