Illa reaches midterm with budgets approved but financing, education and Rodalies unresolved

A government at midpoint

Salvador Illa reaches the midpoint of his mandate as president of the Generalitat on 8 August 2026, two years after his investiture secured through separate pacts with ERC and the Comuns. His minority government approved its first budgets in July 2026, worth 49,162 million euros, ending more than three years of successive budget extensions. The path was not straightforward: Illa withdrew a first budget proposal in March to avoid a parliamentary defeat, and ERC initially refused to negotiate without guarantees of a 100% IRPF transfer to Catalonia. In mid-May, ERC lowered its demands, and Illa and Oriol Junqueras agreed on an orbital railway line, reinforcement of the Agència Tributària de Catalunya, and majority control for the Generalitat and Barcelona City Council in the Consorci de la Zona Franca. Illa has acknowledged these could be the only budgets of the legislature.

The future of Catalonia is not a promise: it is a commitment we are making reality.

Financing and taxation

The financing agreement between PSC and ERC, reached in August 2024, promised a "singular financing" system advancing toward full fiscal sovereignty for Catalonia. The deal was closed in January 2026, with Catalonia set to receive between 4,600 and 4,700 million euros additional per year, depending on the source. Congressional approval is not guaranteed: the PP opposes the model, and Junts, which rejects the pact and advocates an economic concert, holds a decisive vote. The Consejo de Política Fiscal y Financiera has been postponed to September at the PP's request.

The tax front remains blocked. The pact stipulated that the Agència Tributària de Catalunya would assume management, collection, and inspection of all taxes in the community, but the PSOE government has blocked the IRPF transfer. Shared management of the income tax will not arrive before 2028. The Generalitat is reinforcing the ATC with additional staff.

Housing advances

The pact with the Comuns, who hold six seats, has produced the most visible policy results. The centerpiece is a plan to build 50,000 public housing units by 2030. The Parlament has approved measures including caps on seasonal and room rentals, and a body of 60 inspectors, progressively reaching 100, has been deployed to sanction violators. Rental aid has been doubled, and the ITP tax rate for large holders purchasing buildings has been doubled from 10% to 20%, branded by the Comuns as an "anti-speculation tax."

Limiting speculative housing purchases remains pending. Junts and PP requested a ruling from the Consell de Garanties Estatutàries, which found the law unconstitutional, delaying final approval.

Rodalies and education crises

The Rodalies rail service remains a persistent problem. A new mixed company of Catalan majority, with state presence through Renfe, began operating in early 2026. However, the full transfer of trains and tracks from the state to the Generalitat remains incomplete. Service deterioration became especially visible after the Gelida accident.

Education threatens to reopen at the start of the school year. Major unions have announced a strike from the first day, despite an agreement with minority unions to invest 2,700 million euros over three years and reduce class ratios and bureaucracy. The conflict follows failed agreements with CCOO, UGT, and USTEC, and adds to the PISA fiasco, whose investigation continues.

Political outlook

Junts has positioned itself as the alternative to the Govern, accusing the socialists of "sinking" Catalonia. The amnistía could return Oriol Junqueras to the polls and Carles Puigdemont to Catalonia.

Catalonia was coming from a period marked by a certain institutional paralysis, division of society, and a feeling of resignation. Faced with this situation, we took on the responsibility of uniting and serving the country. And almost two years later, we can say that we are fulfilling our commitments.