Catalonia Approves Budget Proposal: Historic Spending and Threat of Snap Elections

The President of Catalonia, Salvador Illa, has decided on a risky political maneuver by adopting a provisional budget without guaranteed support in the regional parliament. This decision comes as negotiations with the key partner, ERC, have reached a deadlock. The main point of contention remains the reform of the IRPF. The PSC is trying to reach a compromise with the central government in Madrid to enable tax cuts for the lowest earners, a key demand of the republicans. Simultaneously, the Generalitat has published data on the fiscal deficit, estimated at 21.092 billion euros, which traditionally inflames relations on the Barcelona-Madrid axis. The political situation is also becoming more complicated in the Congress of Deputies, where the rejection of the so-called social shield by the Junts party and the right has led to the loss of tax reliefs, including for the purchase of electric vehicles. The Socialists accuse Puigdemont's party of voting hand in hand with formations that seek their delegalization. In Barcelona itself, the local administration is trying to mitigate the housing crisis by raising subsidies for the renovation of social housing to 30,000 euros, but key regulations aimed at speculation have been blocked by internal disputes in the city council. Salvador Illa, applying a policy of maximum pressure, has given ERC leader Oriol Junqueras a week to make a final budgetary decision. Since the constitutional crisis of 2017 and the illegal independence referendum, the Catalan political scene has remained deeply divided, and the ability to pass budgets has become a key measure of the stability of regional governments.The opposition parties PP and Vox have already announced they will submit amendments to the entire budget, accusing the cabinet of decision-making paralysis and yielding to the far left. Meanwhile, Junts per Catalunya criticizes the government for continuing a policy based on high social spending without a real vision for economic development. Despite this, Illa remains adamant, claiming that the budget with a 10% increase in expenditure is essential for the functioning of public services. Tensions are heightened by the rejection by trade unions of a proposal for a 2,500 euro annual pay raise for teachers, showing that the front of discontent with the government is also widening in the budgetary sphere. „No contemplo otro escenario que aprobar los presupuestos porque es lo que necesita Cataluña” (I do not contemplate any scenario other than approving the budgets because that is what Catalonia needs) — Salvador Illa