Madrid lifts spending controls on Catalonia region

Spain’s new Socialist government says decision is aimed at normalizing relations with Catalan authorities

The new Cabinet of Pedro Sánchez (c).
The new Cabinet of Pedro Sánchez (c).Uly Martín

The new government of Spain is lifting supervision over Catalonia’s finances, in what it describes as a gesture of goodwill aimed at normalizing relations.

At the close of the first Cabinet meeting of the new Socialist Party (PSOE) administration on Friday, government spokesperson Isabel Celaá said that “instructions are being given to the banks so that the government of Catalonia can make its payments without the need for prior oversight, without the seal of the government of Spain, without discrimination.”

In his first decision, Sánchez is paying one of the mortgages of his deal with the separatists

Albert Rivera, Ciudadanos

Celaá said this was a step aimed at normalizing relations with Catalan authorities, and denied that Madrid will no longer know what the funds are being used for.

“This does not mean that the government will not be informed about allocations that could be geared toward Catalan issues,” she said. “Supervision is being lifted as a gesture of political normalization, in the expectation that it will work.”

Ever since September 2015, Madrid had been keeping tabs on the Catalan government’s use of funds from the Regional Liquidity Fund (FLA), to make sure that the money did not go to sponsor the independence drive in the region. Catalan authorities were required to send in monthly, then weekly reports. Banks were also instructed to run all transactions made by the Catalan government by Madrid first for approval.

After the illegal referendum of October 1, 2017 and the unilateral declaration of independence that followed, the central government of Mariano Rajoy invoked Article 155 of the Spanish Constitution to implement emergency measures that suspended autonomous powers in the breakaway region.

Government spokeswoman Isabel Celaá at the press conference after the Cabinet meeting.
Government spokeswoman Isabel Celaá at the press conference after the Cabinet meeting.EUROPA PRESS

Direct rule continued until June 2, the day when the new members of the Catalan government took office (and the same day that Spain’s seventh prime minister, Pedro Sánchez, was also sworn in).

When Catalonia’s powers of self-government were restored, so was its ability to make its own payments. But the requirement for banks to inform about transactions had remained in place, until today.

According to Madrid, the Catalan government will not require prior authorization for each and every expense, but there will continue to be a monthly review of payments made over the previous four weeks.

Celaá’s announcement caused some confusion as to whether all financial oversight in Catalonia has been lifted or not. In an explanatory note released at 6pm, the Treasury Ministry confirmed that what’s been axed is the prior control of the Catalan government’s bank payments. However, the Generalitat “remains subjected to the control mechanisms on spending that all Spanish regions that participate in the Regional Liquidity Fund are subject to.”

Meeting with Torra

We have seen good intentions, but for now we have yet to hear about any of his policies, which continue to be Rajoy’s policies

Carles Puigdemont, ex-Catalan premier

Asked about Pedro Sánchez’s plans to meet with the new Catalan premier, Quim Torra – a hardline separatist who supports a Catalan republic – the government spokeswoman said that sensitive issues will not be on the agenda.

“The right to self-determination is out of any conversation. The issue of Catalonia cuts across the entire government, but leadership on this matter falls to the head of government,” she said. “Sánchez will hold bilateral meetings with every single regional premier, not just with Torra but also with Torra.”

Carles Puigdemont, the former Catalan premier who was removed by Madrid when Article 155 went into effect, and who is now in Germany fighting extradition to Spain on rebellion charges, expressed hopes about the new Spanish government.

Puigdemont has publicly urged Sánchez to address the Catalan political crisis, and said that the latter’s statements suggest there could be room for dialogue.

In an interview on the Catalan radio station RAC1, Puigdemont said that Sánchez “has generated expectations above his possibilities.”

“What matters, however, is not expectations, but policies. We have seen good intentions, but for now we have yet to hear about any of his policies, which continue to be Rajoy’s policies, at least on the issue of Catalonia,” he said.

Opposition: favors returned

The government’s announcement that it is lifting oversight over Catalonia’s spending drew quick criticism from the Popular Party (PP) and Ciudadanos, who suggested the measure is a result of Sánchez’s promises to Catalan separatists in exchange for their support at the no-confidence vote against Rajoy last Friday.

“So now we know Pedro Sánchez’s first measure, a concession to the secessionists: lifting financial control over the Generalitat’s finances,” tweeted the conservative party.

Albert Rivera, head of Ciudadanos, made similar remarks: “In his first decision, Sánchez is paying one of the mortgages of his deal with the separatists, lifting control over the accounts in Catalonia. Whatever Torra earmarks for reactivating the process against our democracy will be his responsibility. A serious mistake.”

English version by Susana Urra.

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