A difficult deal

Artur Mas appears to have his inauguration as Catalan regional premier assured. But the difficulties he is facing to come up with a legislative agreement with the Catalan Republic Left (ERC) to guarantee stability in his government demonstrates how his position has been weakened after last month’s early elections — which he never should have called. The need to reach a deal with radical pro-independence supporters has sparked tension inside the coalition, and is making the regional government unstable, which could put Catalonia on a dangerous path to uncertainty. The first challenge centers on the fact that what is really being negotiated is a tripartite deal, because the nationalist coalition is divided into two parts: Convergència and Unió.

Similar to the ERC, Convergència campaigned on a pro-independence platform through self-determination. This common outlook has made it easy for Convergència to hammer out a pledge with the ERC over a future referendum on Catalan independence. But the ERC’s insistence on setting a precise date for the vote clashes with the position taken by Unió, which reluctantly accepted that the vote on sovereignty be included in the platform. It now has serious doubts whether it can ever be held. While there isn’t any legal framework that guarantees such a referendum, and with the chance of agreement with the ruling Popular Party (PP) remote, the coalition could find itself in a dire predicament: either hold the vote illegally or give it up. Both options are disastrous for the coalition.

Just as serious are the ongoing negotiations over the government’s economic policies. The CiU has backed a liberal austerity plan, with a string of cutbacks and privatizations, to meet with the goals outlined in the Stability Pact with Madrid. On the other hand, the ERC has been demanding changes to current policy to lessen the burden borne by citizens. The list of demands includes a retraction of some policies that have been introduced by the CiU in the past two years it has been in government, such as the elimination of an inheritance tax and a reduction of a personal income bracket in which citizens are required to pay a wealth tax from 700,000 to 500,000 euros. To increase revenue, the ERC is also asking for new taxes on nuclear energy, soft drinks, and empty foreclosed homes held by the banks. These calls have made Unió very uncomfortable.

The deal includes a third component leg that calls for the speeding up of developing Catalonia’s “state-like structures,” including the creation of its own tax-collection unit, central bank and social security and unemployment agencies. While it may appear to be an easy area in which an agreement could be reached, it is causing a lot of institutional conflicts because there is no legal or political framework for such a move. Even trying to develop these structures would entail mammoth modifications to the national law.

The worst thing that the Spanish government could do at this point is to engage in a counterattack with a series of legislative measures aimed at curtailing the Catalan government’s authority and embarking on a re-centralization of powers, which would only aggravate the situation. The difficult economic circumstances facing Spain today and the regional crisis — which, without a doubt, must be resolved — call for politicians on both sides to be realistic and capable of looking beyond the scope of things in order to build bridges and use dialogue to resolve their differences.