ERC pressures Moncloa ahead of key financing meeting

The central government and the Catalan government will address today, in a bilateral commission, the specifics of the unique financing, a model agreed upon between the Socialist Party of Catalonia (PSC) and the Republican Left of Catalonia (ERC) for the investiture of Socialist Salvador Illa, which both governments must now turn into reality.

The meeting, however, is taking place under intense pressure from Republicans, who warn that the deal is not finalized and threaten to withdraw their support for the Socialists if their demands are not met.

The meeting is scheduled for 12:00 at the Palau de la Generalitat. On behalf of the Spanish Government, the delegation is led by the Minister of Territorial Policy, Ángel Víctor Torres, along with the Secretary of State for Territorial Policy, Arcadi España, and the Secretary of State for Finance, Jesús Gascón. The Government is represented by the Minister of Economy and Finance, Alícia Romero.

Notably absent from the government delegation is Vice President and Minister of Finance María Jesús Montero. In recent weeks, Montero has been the target of criticism from the ERC (Republican Left), which accuses her of being a hindrance to the negotiations, in part because of her profile as the PSOE (Spanish Socialist Workers' Party) candidate in Andalusia, a region traditionally critical of fiscal pacts for Catalonia.

ERC raises blood pressure

ERC leader Oriol Junqueras issued a warning on Saturday, leaving his support for any announcements that might emerge from the meeting in the air. "At this point, it's very difficult to know how this negotiation will end," he stated, putting the pressure on the Socialists to ensure that the agreement on the financing model and, above all, tax collection by the Catalan Tax Agency (ATC) is finalized with clear details and deadlines.

Far from waiting, Junqueras announced a parallel offensive. ERC will present a bill in Congress on its own to require Catalonia to collect all taxes. This maneuver is a challenge to the PSOE, which he urges to support the initiative. "The Socialist Party is surely aware of the consequences of the decisions it makes," Junqueras warned, demanding "courage" from his partners.

The message is that if there is no specific funding on the terms ERC demands, there will be no support for the Budget or other measures from either the central government or the Catalan government. "The more specific agreements we reach in this bilateral agreement, the easier it will be to reach possible new agreements with ERC," he stated.

Today's Bilateral Commission is expected to produce an agreement to advance the tax management of personal income tax, with the goal of the Generalitat achieving substantial progress in this area by 2026. This timeline reflects the original agreement between the PSC and ERC, endorsed by the PSOE, which established that the ATC would collect personal income tax starting in 2026.

The model establishes that the Generalitat (Catalan Government) will manage, collect, liquidate, and inspect all taxes incurred in Catalonia. It also establishes that solidarity with the other regions must be limited by the principle of ordinality and provides for the Catalan administration to substantially increase its regulatory capacity.

Today's meeting therefore represents the key step toward formally adopting a cross-party agreement by the relevant executives, although government sources emphasize that a new regional financing system must ultimately be signed by multilateral organizations.

ATC capacity

Beyond the figures and deadlines, the focus of the ERC's pressure is on the real capacity of the Catalan Tax Agency. Junqueras emphasized that the ATC cannot be "subordinated" to the state Treasury and must exercise its powers "fully," without renouncing "coordination" in areas such as the fight against tax fraud.

Herein lies the main practical challenge. Created in 2008 under the Statute of Autonomy, the ATC currently has 839 employees. This figure, despite the 200-person reinforcement announced in May, is far from the approximately 3,800 employees of the State Tax Administration Agency (AEAT) in Catalonia.

Catalan President Salvador Illa himself acknowledged after his inauguration that the Catalan Tax Agency will need to at least quadruple its size to manage all taxes.

A telling fact about its current limitations is that only 34.2% of its staff belongs to the tax bodies specializing in management and inspection. Today's meeting will not only test political will but also the feasibility of a transfer of this magnitude.