Why the Basques and the Catalans do not?

Under the tree are the Fueros and, around them, sailors, farmers and miners pay homage with their tools of work. A sunny day in Gernika (Bizkaia) and the impressive multicolored window covering the roof of the Casa de Juntas makes the whole room shine. The work is a reminder of the historical autonomy of Biscay that, like the other Basque territories, has been articulated for centuries by the statutory regime. A tool that Spain has accepted as a unifying element.

A few meters from the room stands the historic oak, symbol of Basque freedoms. Next to him the nobles of Biscay met in the General Meetings, the kings of Spain swore their respect for the fueros and now the Lehendakari promises his position. In 1200, the Basque territories were incorporated into the Crown of Castile but retained their institutions. Thus the Lege Zaharra (old law) was accepted, recognizing them as a tax-free zone and respecting their internal organization.

This balance, which allowed Bizkaia, Gipuzkoa and Álava to manage their own tax systems, was called into question in the 19th century, when the new liberal State advocated centralism and equality of laws. In 1876 and after three Carlist wars, the Basque fueros were repealed, to which the concert replaced.

The concert created a stable relationship with Euskadi, where the Constitution had the least support

Until then, the three councils had been responsible for the collection. After years of wars, the State, lacking in resources, opted for a quick formula to recover revenues: in some provinces in which the State Treasury had very little intervention, it established that the Basque administrations would hand over part of the taxes. “The objective of the decree was not the differentiation but the assimilation in the general regime of Spain: the Concert is not a Basque invention, it is an imposition,” says Pedro Luis Uriarte, former Minister of Economy and expert in the field. With the Civil War, Franco suppressed in 1937 the Concert in Bizkaia and Gipuzkoa as revenge for supporting the republican government. Álava and Navarre kept it.

After the Constitution of 1978 and the Basque Statute of Autonomy, the 1981 concert modeled the current system and established the quota, the annual payment of Euskadi to the State for non-transferred competencies such as infrastructure and Defense. “The concert -explains Uriarte, who participated in the negotiations- managed to create a relationship of stability with the territory where the Constitution had the least support, less than 30%.”

The Spanish ruling class, with different majorities and parties in power, has always supported the rule. Since 1981, 16 bills related to it have passed through the courts, never being rejected. “The concert has had an overwhelming legal backing,” says Uriarte, who recalls: “The quota is not established by the Basque Country, it is agreed with the State and ratified by Congress.”

Uriarte: “Communities do not care what Euskadi and Navarra pay because it does not affect them”

The calculation of the quota, established by the Five-Year Law, is complex and has led to multiple political clashes. “Euskadi -explains Uriarte- pays 6.24% of the competences not transferred to the Basque Country, but at the state level, and that percentage of non-agreed state taxes, non-tax revenues such as taxes and fines and public deficit are charged. ” According to Pedro Luis Uriarte, the first figure, the gross quota, is around 5,300 million, while the State invests a thousand less in the Basque Country. Subtracting the gross quota to what is charged, the quota comes out, which is then updated every year.

The agreement signed this week by which the State will return to Euskadi 1,400 million as liquidation of recent years is not for Uriarte any gift. “The Government, without resources because of the crisis, was not interpreting the law correctly: it has committed to return what was wrongly collected”. In turn, the Five-Year Law will be taken to the Cortes for the period 2017-2021, a rule in which there was no agreement between administrations since 2007.

Parties like UPyD and Ciudadanos have proposed to end the fiscal rule, but have not had support. Pedro Luis Uriarte says that the criticisms “are unfair” and come from not accepting two different models, the common one and the regional one, which has risks. “If there is a collection deficit,” he explains, “the State is in charge of the budgets not covered by the autonomous communities through loans, without having to be financed through, for example, the international markets at higher interest rates, which means a great savings. “

The controversies regarding regional financing have sometimes spilled over into the concert, a tool that Spain has nevertheless defended and used as an instrument of accession and stabilization with Euskadi. A bilateral financial relationship forged for almost 140 years.

“The communities,” says Uriarte, “do not care what Euskadi and Navarra pay because it does not affect them, it more or less influences the public deficit, but not the amount that the State gives to the rest of the communities.”

And the Catalans?

I have proposed for Catalonia something similar (to the Basque concert) but more modern. (…) Neither in Sau nor in Madrid were my theses accepted “. Ramon Trias Fargas lamented in La Vanguardia in September 1979 his failure to try to reproduce in Catalonia a concert system similar to Basque in the Catalan Estatut.

In fact, CDC-Trias Fargas was still active at that time in the Esquerra Democràtica de Catalunya that joined Convergència-defended in the paper that drafted the project negotiated with Madrid a revised version of the Basque concert for Catalonia but was rejected by the rest of the groups who considered it impossible for that proposal to be accepted by the Spanish government.

We will never know if it would have been like that. What is objectively true is that the Catalans were absolutely convinced that the proposed economic agreement proposed in the Basque Statute, presented and debated in Madrid before the Catalan one, would not prosper. But it was not like that. It was admitted based on historical rights recognized in the Constitution itself, the old fueros. A legal and political position of which Catalonia could not benefit because its privileges – unlike the Basques – disappeared in a stroke in 1716 and were never recovered.

Since those negotiations, the myth of the frustrated Catalan fiscal pact has gone through the history of autonomism almost from the minute zero, as soon as the new Catalan administration understood that the management of all the taxes paid by the Catalans was decisive to be understood with a State that, After the first impulse, he began to retreat
its decentralizing purpose.

In 1983, ERC – which in the negotiation of the Statute did not defend the model of the concert with CDC – was the first to propose the first reform of the Statute that would include the demand for a financing model similar to Basque. The then president of the Generalitat, Jordi Pujol rejected this proposal, perhaps prompted by the circumstances of the moment: the industrial crisis was causing havoc in the Catalan economy and society – there were municipalities where 50% of the active population lacked employment – and the possibility of establishing a Catalan hacienda could aggravate the disease rather than cure it. It was a short-term calculation that much later CDC would regret.

The truth is that over the next decade Convergència, the hegemonic party in Catalonia, focused on perfecting the benefits of the autonomous system to which it had been accommodated. In 1993, it would be able to increase the volume of taxes transferred, part of VAT and IRPF and three years later it would increase the IRPF quota in the Majéstic pact in exchange for guaranteeing the stability of the government of José Maria Aznar as a minority. The pact of the Majestic is, for the purposes of strategy, similar to the pact that this week the Basques have closed with the Government of Rajoy but it is not at all clear what will bring more benefits.

The truth is that three years later, in 1999 – still under the presidency of Jordi Pujol – and then in 2002 – at the dawn of the constitution of the Catalan tripartite – the Parlament de Catalunya had the opportunity to propose a change in the system of financing and claim, even knowing that Madrid would not be for the work, a financing system similar to the Basque and on both occasions it was concluded that this proposal was not viable in the constitutional framework still in force.

Something similar would happen later with the new Estatut of the year 2006. The normative proposal of the renewed Catalan frame text remains in the general regime that already established the first Estatut although it opens the door to the new Agència Tributària de Catalunya can end up charging and managing the total taxes, provided that this is agreed with the State. That is, the mechanism continued to be based on an assignment of the central government, not on the definition of a sovereignty over the fiscal resources generated by Catalonia. The Estatut wanted to change the system from within the system itself. And it did not work. The judgment of the Constitutional Court of 2010 certified the calculation error.

In 2012, Artur Mas, after assuming the presidency of a Generalitat in financial bankruptcy, recovered this time itself, the proposal of a reorientation of the financing system. From regional multilaterality to Basque bilaterality. And that is what he was to propose to the president of the government in a meeting held on September 20 at the Moncloa in which the president of the government responded with the Constitution in hand: the fiscal pact is unfeasible. The refusal was accepted by Mas with a warning: “or you accept the pact to abide by the consequences”.