PUBLIC FINANCE

Rajoy calls for unity within PP on regional funding debate

Madrid among party fiefdoms concerned about Catalan influence over possible new carve-up

Prime Minister Mariano Rajoy’s secret meeting last week with the Catalan premier to discuss a new financing model for the regions has caused unease where he least might have expected it: within his own ruling Popular Party.

On arriving at a meeting of PP barons on Wednesday, the premier of Murcia, Ramón Luis Valcárcel, complained that the current system of financing worked against his region and called for equal treatment of all the regions without giving preferential treatment to Catalonia. During the meeting, Rajoy launched a call for unity within the party and pledged talks with all regions.

Artur Mas and his Catalan center-right CiU nationalist bloc and other parties in Catalonia started a campaign to secure a referendum for the status of the region within Spain after Rajoy rejected the CiU leader’s demands for a revenue-sharing pact similar to that enjoyed by the Basque Country.

The economic commissioner for the region of Madrid, Enrique Ossorio, on Tuesday, also made clear his unhappiness about the current system of financing. Ossorio demanded an overhaul of the system of divvying out value-added and special tax receipts among the regions. He pointed out that while Madrid accounts for about 20 percent of Spain’s GDP, it only receives 17 percent of the revenues generated by VAT.

Ossorio also called for equitable treatment of the regions and demanded a “multilateral agreement” on changes. “The last one was bilateral, designed by the central government and Catalonia,” he said pointedly.