Economists denounce the Catalan quota and propose to level taxes: “It is not about sitting down and asking for a small payment from the State”

Granting Catalonia an economic agreement similar to that of the Basque Country or Navarre would entail a reduction in the income that the autonomous communities receive from the State to finance their health, education and social policies. The enormous financial hole that Catalonia’s departure agreed by the PSC and the ERC would produce, which would cost the State 25 billion euros, can only be “filled” in two ways: “by increasing taxes or by increasing the public debt”, warns the Economic Observatory of Andalusia (OEA), which presented a report on Wednesday in Seville on the consequences that this “bilateral” agreement would have – in its opinion, neither of them positive – if it were consummated. The president of said independent economists’ association, Professor Francisco Ferraro, highlighted a third possibility, namely that services would be “reduced” to pay for Catalonia’s fiscal independence, which promotes the political pact that allowed the investiture of the socialist Salvador Illa as president. of the Generalitat. In another case, experts agree that Andalusia, like the rest of the autonomous communities, would be harmed by a proposal that goes beyond a financing reform. “It is an amendment to the entire current model of the State” and therefore requires a modification of the Spanish Constitution. This is the opinion of the professor of applied economics and researcher at the Foundation for Applied Economic Studies (Fedea), Diego Martínez, in charge of analyzing the report. The document also puts on the table a decalogue of proposals to guide the reform of regional financing on the eve of the meeting that the President of the Council of Andalusia, Juanma Moreno, and the President of the Government, Pedro Sánchez, will hold in Moncloa this Friday. To begin with, Andalusia is at a disadvantage due to the current model for distributing state funds, which came into force in 2009 and expired in 2014, because “different governments of different political tendencies have been unable” to change it. The system means that Andalusia receives 183 euros less than the average of the autonomies in terms of adjusted per capita funding, which does not coincide with its real population but is corrected by applying other criteria such as age, area or geographical dispersion. Even in the details of the Catalan pact, the Economic Observatory considers it “unsustainable” in the medium and long term for the State and its “bilateral” determination between a region and the government to satisfy a political need is unacceptable. “The known experience with the Basque concert or the Navarrese agreement reveals the lack of solidarity that these areas maintain with the State area and the rest of the communities. “Its response in the Catalan case would mean a considerable deterioration in the redistributive capacity of the State,” warns the report Diego Martínez, who was Secretary General of Autonomous and Local Financing at the Ministry of Finance under the direction of María Jesús Montero. refutes, without naming her, his former boss: “It is something very similar to an economic agreement, we are not dealing with singular financing” for Catalonia. “Any reform of the regional financing system must be carried out at a multilateral level and within the framework of a national integration project,” he says. The PSC-ERC pact gives a charter to bilaterality. The management and collection of all taxes would be the responsibility of the Tax Administration of Catalonia, which would then “make a contribution” to the State for the cost of the services it provides there and another to be specified as a concept of solidarity. From these coordinations, the agreement “does not constitute the end of the ‘trial’, as claimed [desde el Gobierno]but rather the acceptance of some of the initial assumptions”, such as “unjustified tax mistreatment”, he points out. Two other notes from the report. First, the economists bet that “people, not territories, are the subjects and objects of the redistribution” of funds to guarantee fairness. Second, it promotes “a complete leveling of the fiscal capacities of all communities to provide the same level of services”. This “does not go against fiscal autonomy and does not allow the government to receive the ‘salary’ as an autonomous executive”, explains Diego Martínez, of the aforementioned independent association, who also describes the Moreno government’s fiscal policy as “erratic”. They question the fact that spending has increased by up to 13.9% in 2023, while promoting tax cuts that translate into a growth rate of tax revenues lower than the Spanish average. The Observatory considers it “incongruous” that the Council repeatedly complains about its financing difficulties while promoting tax cuts that “negatively affect revenue collection”. It urges the Andalusian government to develop a sustainable tax policy and improve public management, “without prejudice to a legitimate demand for reform of the financing system”. “More is being spent than ever on health and education”, but this increase “is not reflected in the results”, given the complaints of citizens about its operation, it warns.

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