Spain threatens to cut funds for Catalonia over referendum plan (FT)

Catalan MonitorNews Roundup

Region would have to certify that money was not being used to prepare for vote

Many Catalans believe that the funds are rightfully theirs in the first place because Madrid keeps a disproportionate share of the taxes they pay.

by: Ian Mount in Madrid. The Financial Times. Photo @AFP

 

Spain’s government has threatened to cut off funds for Catalonia unless the administration in the region shows it is not using the money to prepare for a secession referendum.

In a decision certain to raise tempers in Barcelona, Mariano Rajoy’s centre-right government said on Friday that it would tie regional financing for Catalonia to weekly certifications that no spending was authorised toward the vote, which is scheduled for October 1.

Mr Rajoy has repeatedly said the referendum is illegal and cannot be held.

“Not a single euro of the Catalans will be directed toward an illegal referendum that is wanted by few,” Iñigo Méndez de Vigo, minister of education, said after the government’s weekly cabinet meeting.

The threat to choke off funding to the heavily indebted region comes at an already fraught moment in the relationship between Madrid and Barcelona, as the push toward an independence vote approaches a point of no return.

Mr Méndez de Vigo justified the decision because of the pro-secession Catalan government’s accelerating steps toward the referendum and a ruling earlier this month by Spain’s constitutional court, which declared that budget items destined for the referendum were unconstitutional.

In recent days, the Generalitat, as Catalonia’s government is known, has released a draft referendum law that allows for independence 48 hours after the planned vote. It has replaced ministers who were seen as not sufficiently dedicated to the referendum cause.

At the same time, Spain’s court of auditors has decided to try to hold former regional leader Artur Mas and several of his ministers personally accountable for €5.2m used in a 2014 independence straw poll held when Mr Mas was Catalan first minister.

The Catalan government said Madrid was taking “another step . . . to discriminate against the citizens of Catalonia based on how they voted”.“The Spanish government is imposing excessive demands on the public services of Catalonia simply because of the opinions of the government of the Generalitat. We will not submit to this fear,” it said.

The funds in question come from the Fondo de Liquidez Autonómica, a credit line that the government in Madrid created in 2012 to lend money to regions that, during Spain’s economic crisis, could not issue debt in the financial markets.

Since the FLA was launched, Catalonia has received approximately €63bn euros from the fund and is due to receive another €3.6bn this year.

“This is a very important move, because these €3.6bn are meant to improve the situation of the Catalans,” Mr Méndez de Vigo said. He said that Carles Puigdemont, Catalonia’s current first minister, would bear responsibility if the funds were cut.

Under the new oversight, effective immediately, controllers and heads of all departments and public entities with spending power will have to certify personally to the finance ministry each week that they have not directly or indirectly budgeted funds for the referendum.

Even without the added oversight, requesting FLA funds is a source of irritation and embarrassment for the Catalan government. Many Catalans — both those who support and oppose secession — believe that the funds are rightfully theirs in the first place because Madrid keeps a disproportionate share of the taxes they pay.

“Since 2012 we have accepted funds from the FLA because the income from the financing model is insufficient. This shows that the Spanish state does not care about the living conditions of the citizens of Catalonia, and what matters to them is the unity of Spain above the democratic will of the citizens,” Catalonia’s administration said.

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