Key points of the budget agreement proposal between ERC and PSOE

The most tangible figure is the payment of a debt of 18 million in scholarships

The budget agreement proposal announced this Tuesday by Gabriel Rufián, in order for Esquerra Republicana to support the general state budget, contains four fundamental points. These are the following:

Finance intervention

It is agreed to terminate the additional monitoring initiated in 2015

In November 2015, shortly after the victory of Junts pel Sí in the Catalan elections, Mariano Rajoy's government decided to intervene the Generalitat's finances by imposing additional controls: the Treasury would scrutinize all the Government's bills. This intervention was aggravated in autumn 2017, when the State began to control the payments made by banks (for example, to civil servants' salaries). This second degree of intervention was lifted shortly afterwards, in summer 2018, but the 2015 intervention was maintained.

What did this mean for the Generalitat? It was currently a more bureaucratic question than anything else, given that the Generalitat still does not have financial autonomy. Today, Catalunya cannot be financed by the markets and its only source of income is the State, basically because the rating agencies continue to classify the Generalitat's debt as rubbish. And because of covid, this could continue to happen for some time. 

Fiscal Dumping in Madrid

A working group will be set up to equalize taxes

The second main point of the agreement is the creation of a working group to reform the taxation of large fortunes, and to end  the so-called "fiscal dumping" from Madrid, Rufián announced. In fact, for some time now, the Minister of Finance, María Jesús Montero, has been working to harmonize taxation of large fortunes in the entire State, so that the current situation does not take place - in which no wealth tax is paid in Madrid, but it is paid in communities such as Catalunya or Andalucia. In fact, a few months ago Montero set up a working group with senior officials from her ministry to address this issue and possibly create a joint minimum rate throughout Spain for wealth, inheritance, and gift tax. However, this has not yet been done.

Despite the fiscal dumping from Madrid, Esquerra had submitted a budget amendment to make the wealth tax rebates for shareholders of family businesses more restrictive. Taking into account that this tax is not paid in Madrid, the measure could have increased the difference between what businessmen in Madrid pay, and what those in communities where there is such a tax pay, such as Catalunya. Finally, however, this and other amendments were vetoed and will not be approved.

18 million in grants and a moratorium for the self-employed

Freelancers' payment will be deferred by three months

Finally, the last two points of the proposal are the following: firstly, it has been agreed to pay "a debt that the State has with the Generalitat in the management of scholarships and study grants". The amount of this debt, which, according to Rufián, has been dragging on since 2005, is 18 million euros, as this newspaper has been able to confirm.

In addition, a moratorium has been agreed on for three more months (until March 2021) in the social contributions payment self-employed workers make.

EDICIÓ PAPER 16/01/2021

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