The need for a strong and stable government

By Marta Espasa

 

After the November 25th elections in Catalonia, the next step is to form a government and move forward with the main issues that concern our country. It is clear that the elections have left the current government of Convergència i Unió in a much weaker position than the one they had in the previous legislature. With fifty seats it is necessary to make pacts with other political forces in order to continue governing the country.

 

This is an exceptional situation. On one hand, CiU has committed itself to carrying out a process that will lead to a consultation on the decision to create a Catalan state. At the same time, it is urgent that some very painful budgets get passed, budgets that include a reduction in spending of more than 4 billion euros that is coupled with a poor outlook for a reactivation of the economy. These are difficult times.

 

Considering the situation it is clear that a pact -either in the Catalan government or the parliament- is necessary. If this does not happen, in addition to creating an extremely delicate situation within Catalonia, the image we would be projecting would be detrimental to future negotiations with a central government that now sees itself much stronger than a mere few weeks ago.

 

One of the urgent issues that will have to be discussed with the central government is the relaxing of the 2013 public deficit target. Right now the objective is for this deficit to not exceed 0.7% of Catalan GDP.  It is important to recall that for 2012 the target was set at 1.5%, which will be difficult to reach. If the central government does not grant more flexibility on this issue, 2013 will be the year of true and raw austerity. This is because if we have to reduce the deficit to practically impossible levels and pay the mandatory interest —which is rising at an accelerated pace— the only way to balance the budget is to increase revenue —something quite complicated considering today’s economic crisis— and drastically reduce the so-called departmental spending, which means healthcare, education, social services, infrastructure, culture, etc.

 

In order to deal with this delicate situation we need, more than ever, to make a pact within Catalonia in which the country’s interests are placed before the interests of the political parties. ERC, in this sense, is the political party that could give CiU the necessary support. Firstly, because the two parties have similar positions on the consultation on independence, and secondly, because when it comes to the economy (taking into account the budgetary outlook for 2013), both sides should make an effort to find common ground and modulate the contents and, in due time, their starting positions. In this way, with regard to revenue for example, ERC proposes reintroducing the tax on inheritance and donations for those with the highest patrimonies, creating new taxes related to the environment and unhealthy products, and fighting fiscal fraud, among other issues. It is not big fiscal reforms but instead modifications of the current tax system that can generate increased revenue. With regard to spending, it is obvious that we need to reach an agreement on how to reduce it until we achieve acceptable deficit levels, as CiU is arguing for, but also to ensure we preserve the core structure of the welfare state. It is a matter of closely analyzing the different approaches and searching for the common denominators.

 

If we can’t do this, then the situation ahead of us is truly distressing and we will find ourselves in the worst of all possible scenarios: we will have problems advancing the process of the consultation, it will become impossible to govern Catalonia, we will become weaker in international markets and we will be faced with more cuts and the high probability that the Spanish state will intervene. In exchange, in a scenario of mutual cooperation, the results could be completely the opposite. It is a simple application of game theory, which shows us mathematically that cooperation leads us to an optimal situation, but if each player (political party) wishes to maximize their benefits to the detriment of the other, in the end the game is no longer cooperative and everyone ends up losing. And even though both players are vying for practically the same electorate (many of the votes ERC won were people who had voted for CiU in prior elections), both parties need to act with a certain degree of grandeur, and they must reach an understanding and forge a monumental pact. It is a necessity and an opportunity of historic proportions.

2012-12-03