The Minister of Finance, Mª Jesús Montero, met yesterday at the Fiscal and Financial Policy Council with the finance ministers of all autonomous communities—with the exception of the Basque Country and Navarre, which are privileged with an “economic agreement and quota” system (concierto y cupo) similar to what Catalan pro-independence supporters now aspire to achieve—to explain the new financing system agreed upon by the Government and the leader of ERC, Oriol Junqueras, in exchange for his parliamentary support for Sánchez. The rejection was practically unanimous. Even two of the three communities governed by the PSOE—Castilla-La Mancha and Asturias—expressed their opposition. Only Catalonia, governed by former socialist minister Salvador Illa, showed support for the new model.
Faced with the refusal of the autonomous communities to even begin negotiating a “pre-cooked” model between the Government and a pardoned coup plotter, Oriol Junqueras, the Minister of Finance surprised those in attendance by stating that, if the new system is approved in Parliament—a goal for which they are trying to attract the fugitive Puigdemont, who has initially dismissed the agreement as insufficient—the communities can choose to opt in, or not, and continue with the current model. By sticking to the current model, of course, they would be unable to access the €20 billion in additional financing that the Government has put on the table to try to secure their agreement. €4.7 billion of those €20 billion would be allocated to Catalonia, which has already shown enthusiasm for the government’s proposal.
According to FEDEA’s calculations, the “arbitrary” criteria introduced in the new financing model to privilege Catalonia would allow the region to reduce its contribution to inter-territorial solidarity by €1.5 billion —dropping from the €2.266 billion it contributed in 2023 to just €810 million at present.
The FEDEA analysis confirms what was an intuition in the early stages of the system’s review: that there are a series of mechanisms of “doubtful justification” that specifically benefit Catalonia. The study estimates that these mechanisms almost entirely offset the €3.975 billion contribution from Catalonia’s fiscal capacity made to the “common pot” during the first phase of the system. This initial phase is what guarantees sufficient funding for all autonomous communities to provide basic public services, constituting the very heart of the financing system.
Starting from that first step and thanks to the scheme established by the Government, Catalonia recovers €1,268 million in the vertical leveling phase, the sole objective of which is to close the gap that all autonomous regions have with the one presenting the highest fiscal capacity per inhabitant, the Community of Madrid.
It receives another €216 million thanks to the new Climate Fund that the Government has created—reportedly to support the regions most affected by climate change—of which Catalonia is the second largest beneficiary after Andalusia.
Furthermore, it gains no less than €1,441 million thanks to the new tool that enables those autonomous regions that so wish (only Catalonia has requested it) to receive a portion of their corresponding share of VAT revenue based on the income associated with SMEs headquartered in their territory, rather than according to the consumption associated with their territory, as is currently the case.
FEDEA describes this mechanism as an ‘imaginative excuse to grant Catalonia a juicy financing premium on account of VAT.’ One figure is particularly revealing: out of the €2,968 million allocated to these two new schemes, Catalonia receives no less than €1,657 million—more than 55% of the total.
The net effect of all these adjustments is that Catalonia will recover nearly the entirety of the €31,448 million it must contribute based on its fiscal capacity, guaranteeing a return of €30,367 million. The Community of Madrid, for example, would contribute €33,047 million to the system under Montero’s model and would only see a return of €25,000 million.
