When the PSC and ERC entered into their agreement to install Salvador Illawhich included a new financing system for Catalonia under which the community would collect all taxes generated in its territory, the government allowed the Republicans to monopolize the story. In an agreement that was so risky, Moncloa did not want to add new threats because of some statements made by Pedro Sánchez and his ministers. So he remained silent, while criticisms multiplied among the regional leaders of the PSOE, until Illa reached the State Palace. But now that he has achieved this goal, the situation has changed.
In the face of the European Council’s reform speech, which, in a diagnosis widely circulated outside the Republican ranks, sees the new system as meaning “economic harmony” for Catalonia, the government, through the First Vice-President and Minister of Finance, María Jesús Montero, has in recent days denied this expression. The executive only speaks of “single financing” and adheres to the literal content of the agreement. But it also goes beyond the words that appear in the document. The Socialists have begun to point out that the new system, which still needs the approval of Congress to enter into force, in a parliamentary process with uncertain results, will also be able to include the autonomous regions that wish to do so. It is therefore not a closed model specific to Catalonia. Like the debt settlement that was also agreed with the ERC in exchange for its support for Sánchez, it is open to other regions.
Support in the House of Representatives
In words obscured by his direct refusal to use the term “economic coordination” and the subsequent reaction of the Equity and Reconciliation Commission, which threatened to withdraw its support for the government if what had been agreed was not met, Montero called on local communities on Wednesday to “take inspiration” from the new Catalan model “to explore other ways and paths” beyond the common system of financing, which works for everyone except Euskadi and Navarre. He added that the new model “gives a new appearance that could interest the whole region.”
The executive power bid aims to defuse the unrest that the agreement with the ERC has caused in several autonomous regions, both those governed by the PP and the PSOE, and targets in particular those less favourable with the current system, approved in 2009 and expiring since 2014: Andalusia, the Valencian Community, Castile-La Mancha and Murcia.
This is a medium-term bet. To be effective, the Catalan model, which speaks of “solidarity” between regions without much precision and avoids specifying the share that the general jurisdiction will pay to the central government to cover the services provided by the State to society, needs to be validated in 2018. The Congress of Deputies through a reform of the organic financing law of the autonomous communities. It will not be easy for the government with some of its traditional partners. Without counting the discontent within the PSOE, where barons traditionally close to Sánchez, such as the Asturian Adrian Barbón and the Castilian Leoni Luis Tudanca, criticize the agreement, there are some pieces that do not fit together perfectly. They talk together of “deception”, while the PNB and some of the currents that make up Sumar and BNG have moved far away from the agreement with the ERC.
Against the “nominal” debate.
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Then there are the Republicans who last Wednesday ruled against Montero’s words about the “lie” that they consider to be the talk of an “economic party” for Catalonia. Some members of the government claim that the vice president was not very “skilled” that day, but Moncloa asks to focus on the consequences of Illa’s inauguration, leaving behind a decade of separatist governments in the Generalitat, and celebrating that now we are no longer talking about Catalan independence, but about autonomy.
In this sense, the executive welcomes the fact that regional funding is now at the forefront of the political debate. It is an issue on which Sánchez feels comfortable, and he points out whenever asked that since 2018, the year he arrived in Moncloa, the government has pumped 250 billion euros more into the system than the PP had in the previous six years.
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