The Financial Times published an article 3 days ago about the 11.000 million euros the Generalitat (the Catalan Government) will soon need to raise for this year’s funding needs. Apparently the financial situation the new Catalan government has inherited from their predecessors is worse than initially expected. The Generalitat already issued around 3.000 million euros worth of bonds to the general public back in November and finding almost 4 times that amount is not going to be easy, maybe even needing to offer a higher interest rate than in the first round.
Now the Spanish, in an exercise of political surrealism, have launched a strategy based on blaming Catalonia for the Spanish crisis and with quite some success so far. Catalan Government’s debt is around the 40 thousand million euros mark, which compared to Spain’s total public debt, more than 500 thousand millions, is only a small portion.
To my despair (and to the despair of many well informed Catalans) what the new Catalan government fails to explain is that Catalonia suffers a fiscal plundering of 10% of its GDP every year, which amounts to more than 22000 million euros. Meaning not only that if Catalonia controlled its own finances its finances would be pristine but public services and infrastructures would be a lot better than they currently are.
To illustrate the enormity of Catalonia’s fiscal plundering I’ll use a parallel case. Bavaria, one of Germany’s richest länder (states) which a GDP that doubles Catalonia’s, had last year a fiscal deficit of 3.491 million euros with poorer german länder and the Bavarians are already taking action to limit this amount because they find it unsustainable. The difference is that Germany is an actual federal state, as opposed to Spain where its Autonomous Communities are a mere local decentralisation and in the case of Catalonia, severely underfunded.
Compare Bavaria’s case with Catalonia’s and with a government incapable of denouncing the situation and you can imagine our despair. Especially when the Spanish even go all the way as to blame Catalonia (and not the Spanish growth model based on speculation of the last 2 decades) for their crisis as a preparation of another assault to attack Catalonia’s precarious self-government.
So please Mr Mallet, from Financial Times, please next time you talk about Catalonia’s debt issues, which I’m sure will happen sooner rather than later, please consider that in spite of our government’s terrible communication policies all truth must be told.
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