About twenty institutions from the Catalan economic and business fabric have joined forces to demand a reform of the autonomous financing system. In an unprecedented unanimous stance on fiscal matters, the influential actors in Catalonia's economic landscape have demanded ambitious measures to correct a system they consider to be currently not transparent, equitable, or efficient.
This is stated by the thirteen Catalan Chambers of Commerce, Foment del Treball, Pimec, Barcelona Global, the Cercle d'Economia, the Col·legi d'Economistes de Catalunya, FemCat, and the Racc, in a joint declaration that the 20 institutions have worked on discreetly, and which is also supported by Cecot. In it, the entities emphasize the need to correct a system they believe hinders the economic progress and social well-being of many Autonomous Communities, and propose two ways to do so: either by thoroughly reforming the current system, or by changing it for a new system, either with a federal model or through a fiscal pact.
Regarding this possibility, the 20 signatory institutions argue that a federal model or a fiscal pact would ensure the transparency and efficiency of the system, and propose accompanying this option with an interterritorial solidarity mechanism. In the case of opting for a federal model, the entities point out that the regulatory, management, collection, and inspection capacity of all Autonomous Communities should be redefined, to move towards a system in which each territory would directly and within the same fiscal year have the income that would correspond to it.
They argue that the financing system must be equitable and respect the principle of ordinality, in addition to allocating resources based on differences in the cost of living between territoriesThe institutions assure that a fiscal pact would also "ensure the financial sufficiency of Catalonia". With the Generalitat as collector and administrator of all taxes generated in the territory, it would assume a normative power over them similar to that corresponding to the foral communities, according to the proposal that emerged from the Catalan business and economic fabric.
In the case of opting to maintain the current financing system and modify it, the institutions warn that "the reform should be deep and broad to ensure financial autonomy and improve tax management capacity" of the Autonomous Communities. "If financial autonomy is not resolved definitively and clearly, we will remain entrenched in the permanent and confusing debate about financial imbalances at the territorial level," they warn, and also ask to reform the advance payment system.
Regardless "of the new financing model that all political forces must inevitably agree upon," the entities maintain that mechanisms must be introduced to guarantee institutional loyalty and to shield the competencies of each administration. And it is that "one of the main sources of confusion and conflict between the different administrations and political forces lies in the lack of specificity," something they believe must be corrected by shielding competencies and this institutional loyalty.
Respect the principle of ordinality
The institutions promoting the declaration emphasize that the financing system must be equitable and must respect the principle of ordinality, in addition to assigning resources based on differences in the cost of living between territories. Faced with a current system that they believe is not equitable, they argue that equalization mechanisms must ensure that per capita disposable household income in the territories that contribute the most does not fall below those that contribute less.
In the current model and without taking into account the foral communities, Catalonia is the second community in terms of GDP per capita and, however, it is the tenth in terms of the resources it receives. Furthermore, it would fall to the fourteenth position if the variation in the cost of living were taken into account, something that the institutions describe as "decisive to ensure that resources are allocated equitably and that there is no loss of disposable household income in any territory."
The institutions ask that territorialized investment data be published again and that the necessary information to know the fiscal balances be made publicAnd it is that the companies and economic agents represented by the prominent institutions are clear: "Territories like Catalonia, with a greater population density and economic potential, must receive a volume of investments proportional and adequate to their needs". Furthermore, this volume must be in line with the weight of GDP in the Spanish economy as a whole, according to the statement.
Level of budget execution
Similarly, the entities urge to guarantee "a greater correspondence between what is budgeted and what is executed," as well as to enable transparent and effective accountability mechanisms regarding the degree of execution. All this in a context where the total investment of the public sector as a whole in Catalonia is systematically below the weight of the Catalan territory's GDP.
The entities urge to guarantee greater correspondence between what is budgeted and what is executedRegarding transparency, the entities united around this declaration regret that the central Government has stopped publishing the territorial distribution of its investment. For this reason, they urge that territorialized investment data continue to be published with the same format and periodicity as before it was decided to stop making them public exactly one year ago. Also in the interest of transparency, the 20 institutions demand that the necessary information to know the fiscal balances be made publicof all the Autonomous Communities with the State. All with the aim of evaluating a financing system that they urge to change to move towards a more equitable and effective model.