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Sánchez hands over personal income tax to Catalonia to repay ERC for its loyalty despite corruption.

Friday, July 11


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Pedro Sánchez is preparing to repay ERC for the closed support he gave him on Wednesday in Congress to keep the legislature alive despite the shameless evidence that corruption is rampant in the bowels of the PSOE.

This payment is none other than the consummation of the unique financing agreed between the party chaired by Oriol Junqueras and the PSC last summer in exchange for their support for the investiture of Salvador Illa as president of the Generalitat. The Government and the Catalan Executive are finalizing the formula to launch the process by which Catalonia will end up progressively collecting 100% of the taxes generated in the autonomous community, which the separatists were kind enough to christen fiscal sovereignty.

The transfer of all personal income tax generated in the region to Catalonia starting in 2026 will be agreed upon at the bilateral commission between the State and the Generalitat (Catalan Government) to be held next Monday in Barcelona. This requirement was already included in Illa's investiture agreement, but it was a mere commitment that Sánchez and Illa will now formalize and provide the necessary legal framework for the Catalan quota to be implemented.

This legal framework will begin with the registration of a bill by the PSOE and ERC in Congress to promote the reform of the Organic Law on the Financing of the Autonomous Communities (LOFCA), an essential step to remove Catalonia from the common financing regime, as Junqueras intends. The processing of this bill is already expected to take place after the summer recess, which explains the Republicans' obsession with keeping the legislature alive. Seeing it truncated would also imply the collapse of their main political argument at present: having managed to drag the State into recognizing Catalan fiscal singularity and the consequent elimination of one of the mantras that sustain the secessionist creed: the fiscal deficit.

When, within a still-uncertain timeframe, all taxes are transferred to Catalonia, the Generalitat will manage €52 billion in taxes. But, starting next year, it will be able to control approximately half of them, thanks to the collection of all personal income tax, the most important of all taxes. It is no coincidence that the ERC (Republican Left) demanded the transfer of this tax to begin with. Otherwise, it would risk having its investiture agreement with Illa dismissed as minor or even a fraud against separatists, something the Republicans cannot afford in their convalescent state.

However, the parliamentary process for the Catalan quota does not appear straightforward. The bilateral committee meeting next Monday is not expected to determine the solidarity quota that Catalonia will contribute to the State once fiscal sovereignty is achieved, and this element is crucial to obtaining Junts' support for the amendment to the LOFCA and, consequently, for the economic agreement.

The party chaired by Carles Puigdemont warns that it will only support the legal modification that promotes singular financing if the Generalitat (Catalan government) unilaterally decides what solidarity quota it will contribute to the State once all taxes have been collected. The neo-convergents reject that this figure could arise from a prior agreement between the Government and the Generalitat (Catalan government) because they understand that this would perpetuate the"one size fits all" instead of moving towards fiscal autonomy like that of the Basque Country, which is the true intention of Junts (Junts) and which is also part of the conversations that Puigdemont holds monthly with the PSOE emissaries in Switzerland.

It is not a scenario that is ruled out, but rather foreseeable, that the heirs of Convergència will try to modify the outgoing agreements of the bilateral commission at that clandestine table to impose their stamp on it and undervalue what was achieved by ERC, as already happened with the Amnesty Law, initially agreed between the Republicans and the PSOE and subsequently modified at will by Junts to support Sánchez's investiture. The possible castling of Junts is very worrying, admit sources from the Generalitat, who also recognize balances so as not to harm the candidacy of María Jesús Montero to the Junta of Andalusia.

Sánchez's new concession to separatism will bear the stamp of the Ministry of Finance and, therefore, of the vice president. The fact that Montero is on the verge of promoting, from within the government, the dismantling of the Spanish tax system, with the resulting harm to the rest of the autonomous communities, undermines his chances against the Popular Party's Juanma Moreno, who will surely underline his rival's manifest lack of solidarity with the Andalusians.

The government's trick to cover up this insult will be to sell the idea that the unique Catalan funding is fully applicable to the rest of the autonomous regions, as it did when it granted the super-reduction of 17.104 billion to Catalonia, also at Junqueras' request.

That's not an aspect that worries or bothers ERC. We don't care what they do with Extremadura, the Republicans emphasize to this newspaper, in a message they already conveyed to Illa last year during the negotiations for his investiture.

The separatists are not willing to compromise on the principle of ordinality. The government and the Catalan government will design a financing model so that, once the resources allocated for territorial rebalancing have been distributed, the richest communities will not be left behind by the poorest. This is a long-standing demand of Catalan nationalism, which forged the claim of former Catalan president Artur Mas to demand a fiscal pact for Catalonia before the independence process broke out.

The implementation of the economic agreement will also mean significantly expanding the Catalan Tax Agency to assume the management of taxes transferred by the State. The regional treasury currently has around 800 employees and will need to grow to 5,000, according to the Government's estimates, to complete the replacement of the tax officials in the region.

In May, the Catalan government agreed to expand the Catalan Treasury by 200 employees. This was one of the most significant state structures in the secessionist plan developed by Junqueras from his position as vice president of the Catalan government and the Ministry of Economy, which he piloted before the illegal referendum of October 1. Now, Sánchez and Illa's agreement with the Republicans will serve to revive that project while the Socialist Party promotes the alleged political normalization of Catalonia through its leaders.

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