Catalan Separatists Back Deal with Spanish Socialists, Reshaping Regional Politics

In a significant political development, grassroots members of Catalonia's separatist Esquerra Republicana de Catalunya (ERC) party have endorsed a regional government agreement with Spain's ruling Socialists. This decision, made on August 2, 2024, could potentially mend the strained relationship between Madrid and the northeastern region while also influencing Spain's overall fiscal structure.

The narrow majority vote in favor of appointing Salvador Illa, a Socialist, as the new head of the regional government marks a shift in Catalonia's political landscape. The region, known for its economic significance, has been under separatist governance since 2010.

Catalonia's independence movement reached its zenith in 2017 with an unauthorized referendum and a brief declaration of independence. However, the nationalist cause has since waned, failing to secure sufficient support to form a government following the May 2024 regional election. The center-left Socialists emerged victorious but lacked a working majority, necessitating an alliance with the left-wing, separatist ERC to avoid a repeat election.

The preliminary agreement, reached on July 29, 2024, proposes granting Catalonia autonomy in tax collection and management. This arrangement could potentially conflict with Spain's existing fiscal system, where more affluent regions contribute to less prosperous ones. The proposal has sparked concerns about fairness and prompted other regions to seek similar privileges.

"This ambiguity threatens the national fiscal system's fairness where Madrid, Catalonia and the Balearic Islands have very wealthy taxpayers who aid other regions such as Extremadura and Castille-La Mancha."

The deal has faced criticism from opposition parties and some regional Socialist leaders due to its lack of specific details regarding Catalonia's continued "solidarity" with the rest of Spain. However, Prime Minister Pedro Sanchez views the agreement as "a step towards federalisation" and "good news" for the country.

This latest political maneuver follows Sanchez's previous controversial decision to grant amnesty to convicted Catalan separatist leaders in exchange for crucial support for his premiership in 2023. The investiture vote for Salvador Illa could take place as early as next week, potentially ushering in a new era in Catalan-Spanish relations and fiscal policy.