Col·lectiu Emma - Explaining Catalonia

Thursday, 19 april 2012 | Financial Times

English

Recommended article at the Financial Times: "Spain needs a new deal for its regions", by Professor Carles Boix

We strongly recommend the following article: "Spain needs a new deal for its regions", by Professor Carles Boix (Robert Garrett professor of politics and public affairs at Princeton University).

An excerpt:

Spain’s central government has shifted much of the blame for the country’s deficit on to (allegedly free-spending) regional governments. Yet in fact, a lthough most regions manage education and health, most regulatory and tax-and-spend powers remain with central government. More important, the regional system relies on huge fiscal transfers. Catalonia transfers 9 per cent of its gross domestic product in net terms every year, while Extremadura receives resources close to 18 per cent of its GDP. This is heavily distortionary. Net paying regions have to raise debt to cover services (at standards set by Madrid) and even then they cannot make it; Catalan per capita spending on health is about 15 per cent lower than the national average (and this does not take into account income and wage differences). By contrast, net receiving regions are splurging: one in four Andalusians work for the regional government, against one in 10 in any net paying region. 
This situation cries out for a “new federal deal”. Inter-territorial transfers must be reduced to a minimum: they hurt the more productive areas of Spain. More boldly, most autonomous governments should be absorbed back into central government, while full tax-and-spend powers should be granted to historical nations, such as Catalonia, that support the bulk of transfer programmes and are growing restless. 
Spain will only get back on track if the government offers a bold plan that rationalises the state and liberates free enterprise and productive territories.


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Col·lectiu Emma - Explaining Catalonia

Col·lectiu Emma is a network of Catalans and non-Catalans living in different countries who have made it their job to track and review news reports about Catalonia in the international media. Our goal is to ensure that the world's public opinion gets a fair picture of the country's reality today and in history.

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Col·lectiu Emma - Explaining Catalonia