Wednesday, November 19, 2014

Rajoy does not back Constitutional Reform to better integrate Catalonia.

On Sunday the Spanish Socialist Party (PSOE) approved another solemn declaration proposing a Constitutional Reform, after it already did so in July 2013. Once again the PSOE has not detailed their proposal, but insists on building a true federal model, going beyond the current Autonomous Community system. 
One of the Reform's objectives is to better integrate Catalonia and to recognize 
Spanish Prime Minister Mariano Rajoy
its "singularity", although in theory it would not recognize Catalonia's nationhood status and right to self-determination. 
The People's Party (PP) – which runs the Spanish Government and holds an absolute majority at the Spanish Parliament – opposes such a reform although they "agree to talk" about it if the PSOE "details" the proposal, as Carlos Floriano said on Monday. 
However, the Socialists are urging the PP to "immediately" approve the creation of a committee at the Spanish Parliament to debate the Constitutional Reform and begin with expert hearings. The PSOE wants those experts to bring ideas and to gradually shape the Constitutional Reform's extension. The Socialists do not want "to rush" to solve Catalonia's "urgent problem", as stated by the President of Andalusia and PSOE's Chairperson, Susana Díaz, on Sunday. However, the PP is rejecting to take any initiative regarding a Constitutional Reform which they do not support and, therefore, they will not approve the creation of such a parliamentary committee. 

On top of this, Rajoy will visit Catalonia on Saturday November 29 to better explain his arguments, although no political proposals have been announced. Catalan parties are sceptical about Rajoy's visit, particularly if he does not come with any proposal.


Podemos wants a broad Constitutional Reform recognising Catalonia's right to self-determination

Meanwhile, the alternative left party Podemos, which could win the next Spanish elections according to recent opinion polls, has elected Pablo Iglesias as its Secretary General. Iglesias has many chances to become the party's candidate for Prime Minister in autumn 2015 elections. Podemos wants to launch a broad Constitutional Reform in the next parliamentary term, which would include the recognition of Catalonia's right to self-determination. However, Iglesias does not want Catalonia's independence and said that they will work to convince Catalans to stay within Spain. In addition, he stated that the Catalan Government cannot approve a unilateral declaration of independence. "We should decide together" stated Iglesias about Catalonia's potential independence from Spain, after the Constitution has been reformed.

Rajoy to travel to Catalonia to better explain his arguments

Besides, the Spanish Prime Minister, Mariano Rajoy, who was in the G20 meeting in Australia this last weekend, announced that he will travel to Catalonia to better explain how Spain is helping Catalans, their economy and their public services. The Spanish PM will visit Catalonia on November 29, almost in 12 days time and three weeks after 2.3 million Catalans participated in a symbollic vote on independence. Rajoy said that he was aiming "to better explain" himself, although he did not announce he would bring any political proposal. In fact, Rajoy said he would come to Catalonia to tell Catalans "why they should stay within the Euro", implicitly saying that independence would bring Catalonia's automatic suspension from the Eurozone.

The Spanish PM also wants to give further details about how the government he chairs has financially assisted the Catalan Executive. The PP image the Spanish Government has been projecting for the last few months that the Catalan Executive is surviving thanks to the generosity of the Spanish Authorities, while the story is not entirely true explained in those terms. In the last 2 years, the Spanish Government has become the main and almost only source of cash for the Catalan Executive by issuing loans that have higher interests rates than the market ones. The reason is that Rajoy is not allowing Catalan institution to turn towards financial markets to find alternative funding and therefore they have extremely limited access to credit. In addition, the Spanish Government is collecting almost all the taxes in Catalonia and therefore it totally controls the Catalan Executive's funding scheme, controlling the money transfers.

Rajoy has neither recognised nor addressed Catalonia's fiscal deficit

This system is to be added to the structural and persistent fiscal deficit that Catalan taxpayers suffer, since each year they transfer around 8.5% of Catalonia's annual GDP to the rest of Spain in terms of services, infrastructure and grants. Furthermore, the Spanish Government is far from investing in Catalonia any amount equivalent to its GDP or population share. This fiscal deficit and the funding scheme mean that the Catalan Government's public services are under-budgeted compared to other areas. Therefore, the Catalan Government's posts deficit to maintain the quality of public services, which needs to be funded and then the Spanish Executive, which is behind this structural deficit, appears as the only source of revenue in a vicious mechanism.

ACN

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