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To reform the regional funding system

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10.01.2017

After three years of having ignored the review of the regional financing system, in breach of the law itself, the Spanish government has now put it on the table. The funding of the Catalan government interests the citizens who live in Catalonia, as revenues determine the quality of public services.

Given that, some may ask if the Catalans should be interested in the negotiation proposed by the Spanish government. However, one could first ask why they waited until now. Instead of reviewing the regional funding system earlier, the Spanish government preferred an absolute control over the finances of Catalonia through the Regional Liquidity Fund, which was presented as supporting the finances of the Generalitat. In fact, if the Catalan government controlled the taxes collected in Catalonia it would have no treasury problem.

The underfunding of the government of Catalonia has a long history. In 1985, Ramon Trias Fargas, the Catalan minister of Economy and Finance who knew the background of the regional funding system, already reported that the system was intended to suffocate the finances of Catalonia as a tool for political control.

Since then, successive reforms of the system have not improved the finances of Catalonia, as every review simply maintained the situation for communities favoured for political reasons. Among these there is especially the artificial community of the capital of the centralised state, Madrid, though they try to hide it by manipulating figures that do not take into account the effect of being the capital.

The principle of........

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