Catalonia: economic emergency

I don’t want to be an alarmist but Catalonia’s economy is in a state of emergency. After decades (centuries, really) of economic plunder, with the advent of democracy this situation became normal, legislated, legal. Our autonomous government quantified the cumulative fiscal deficit since 1986: an average of 8% of our annual GDP in the last 25 years, about €300,000 million. This amount is equivalent to the entire budget of Spanish for two years . Too much drainage for any economy

Step by step. Each year the difference between what Catalans pay in taxes and what the state spends in Catalonia in the form of goods, services, and benefits is, on average, €16.000 million —against us, we lose this money. This means that each year we give Spain the equivalent to our entire health and education budgets, plus the budget for welfare and subsidies. This is a situation that no economy can withstand, and it is unparalleled anywhere else in the world. On average, for every €100 paid in taxes in Catalonia, only €57 return to Catalonia. A full €43 are kept by the central government to enrich Madrid (and its oligarchy), or to benefit other regions in Spain, which has lead to a collapse, as can be seen in the unemployment rates (35 to 40%) in Extremadura and Andalusia, averages that are more typical of the Gaza strip than of the western Europe.

On top of all this, we are being forced to implement cuts in education, health, welfare benefits and more, because the Catalan government is not allowed to decide on 95% of the taxes collected and even less in how they are redistributed. But the picture is even more bleeding when we consider that the central government owes the Generalitat some €3 billion promised in several agreements that the state failed to comply with. If we add the €5.7 billion investment pledged by the ministry of industry to update various infrastructures, although it would not solve everything, the current cuts could be avoided, unemployment could be reduced and we could boost consumer spending.

Last september the payment the central government to cover Catalan government operations came in too late, and the the Catalan government failed to make the Social Security contributions for its workers. The central government didn’t consider that they were the very cause of the delay in the payment of the Social Security contributions and fined the Generalitat with €24 million. Ridiculous? Tragic! Not mention on how the pharmacies are receiving their payments late as well, or residences for the elderly, or the fact that 30% of the population is at risk of poverty, or that 200,000 children are malnourished in Catalonia. Catalonia is simply starting to fall apart. Meanwhile Spain builds useless infrastructures like trains with no passengers, airports with no flights, or motorways with no cars. Catalonia commuter trains are in shambles, and the Mediterranean corridor is being abandoned —or victim of macabre design plans that would make it stop in Madrid, 350 km away from the Mediterranean sea. We are in constant fight with Madrid to ensure that the Barcelona airport provides intercontinental flights, and suffer the scourge of a dead person every month and a wounded person every week on the N-II road in Girona because “there is no money to convert this road into a motorway.” This is the only road out of all Madrid-bound in Spain that has not been made into a motorway yet.

Can you imagine a salesman in a company that is not meeting sales expectations, but who gets more money in bonuses than the top selling salesman This is the situation between Catalonia and Spain. This salesman will create his own company down the road. That’s what Catalans want.

So, for as long as we stay a part of Spain, we’ll walk straight into decline as a country and as a society. All this, in order to keep the privileged status of the Madrid based oligarchy. Will our children be forced to emigrate so that this oligarchy keeps its privileges? With the yearly 8% of GDP we could become a prosperous country like Denmark or the Netherlands. It’s a big difference. That's our struggle today. That's one of the reasons —of course not the only one— tha we're fighting for our independence.

Àlex Furest

Economist