SPAIN, CONSTITUTION ‘Spain has a historical fear of dismemberment. Catalan secessionism was one of the factors that brought about the Spanish civil war of the 1930s. The constitution of 1978…entrenched democracy, brought prosperity and granted a large dose of autonomy to Spanish regions, including Catalonia,'(he Economist, ‘How to save Spain’, 07th October 2017, p11) ‘But the system was made unwieldy by a decision to grant regional autonomy across the country, rather than just to the Catalans, Basques and Galicians who had long demanded it,’ (The Economist, ‘Outrage in Catalonia,’ 07th October 2017, p26.

SPANISH UNITY V SEPARATISM

‘Spain has found it almost impossible to strike the right balance between unity and diversity. Historically, the pendulum has swung back and forth. The 1978 constitution came down firmly on the side of recognising diversity. It created 19 “autonomous communities” which included both historic “nationalities” (the Basque country, Catalonia and Galicia) and newly created regions elsewhere. Today Spain is the most decentralised country in Europe. The regions are responsible for education, health, much economic regulation and even a good chunk of overseas aid, and have their own television and radio stations. Catalonia and the Basque country have their own police forces, and Catalonia runs its own prisons. The regions have the power to vary the rates of income, wealth and inheritance taxes. In most cases the central government collects taxes on their behalf. But the Basque country and Navarre do their own tax-collecting, under an arrangement dating back to the 19th century. Many economists believe they hand over too little revenue to the central government,’ (‘In two minds,’ article in The Economist Special Report Spain, July 28th 2018, p6-7).

‘Catalans voted overwhelmingly for the new Spanish constitution 40 years ago. Basques did not, though mainly because of political competition between the terrorist separatists of ETA and moderate nationalists. Catalans and Basques might have felt happier if they alone had been granted self-government, but Spain has, or has developed, other strong regional identities. Andalusia, for example, insisted on being treated much the same as Catalonia during the transition to democracy. In half a dozen regions Castilian Spanish is not the only language,’ (‘In two minds,’ article in The Economist Special Report Spain, July 28th 2018, p6-7).

‘Decentralisation has had its successes, helping to reduce regional inequalities, but over time the fudges in the constitution’s provisions for what Spaniards call “the territorial model” have come back to haunt the country. The decentralisation process was left open-ended and the distribution of powers is ambiguous, partly because the regional governments were set up after the constitution was introduced (except for the Generalitat in Catalonia). This has led to constant wrangles at the constitutional tribunal. The PP, Ciudadanos and many voters now think that decentralisation has gone far enough (or even too far). To make things worse, the system for financing regional governments is opaque and widely seen as unfair,’ (‘In two minds,’ article in The Economist Special Report Spain, July 28th 2018, p6-7).

‘When Spain still had a predominantly two-party system, the Basque and Catalan nationalists were able to exert leverage over minority governments in Madrid, always extracting more powers or money for their votes. Jordi Pujol, Catalonia’s nationalist president from 1980 to 2003, was a master of this. He rejected offers to join Spanish governments, preferring to build a nation at home. He wanted to sharpen the constitution’s fudged distinction between “nationalities” and “regions”. But the PP governments of 1996-2004 leant in the opposite direction. Their investment in a radial network of high-speed trains and motorways was seen in Catalonia as favouring Madrid,’ (‘In two minds,’ article in The Economist Special Report Spain, July 28th 2018, p6-7).

‘Still, support for independence in Catalonia ran at only around 15% until 2006, when a centre-left government in Barcelona tried to reform Catalonia’s statute of autonomy. The reform was approved by the Catalan and national parliaments and by Catalans in a referendum (in which only 49% voted). But in 2010 the constitutional tribunal knocked out several of the key changes as incompatible with the constitution, including those that indirectly recognised Catalonia as a nation and granted it control over the courts. That exposed a flaw in the constitution, which failed to stipulate that any proposition put to referendum must first command agreement that it is constitutional. In Catalonia the ruling was seen as a victory for Spanish nationalism,’ (‘In two minds,’ article in The Economist Special Report Spain, July 28th 2018, p6-7).

‘The desire for independence was magnified by the economic crisis. Protesters took to the streets of Barcelona to demonstrate against austerity, for which the Catalan government blamed Madrid. Critics also point to a scandal over illegal commissions on public contracts in Catalonia, claiming that the drive for independence was a way of distracting attention from this,’ (‘In two minds,’ article in The Economist Special Report Spain, July 28th 2018, p6-7).

REGIONAL FUNDING

‘The way money is shared out among the regions is governed by complex criteria. One is to help even out the differences between richer and poorer. Some, and not just in Catalonia, think this has gone too far. Tax revenues per person in Madrid, for example, are twice those in Extremadura, Spain’s poorest region. But after redistribution Extremadura gets 15% more money per person than Madrid (adjusting for the cost of service provision), according to Ángel de la Fuente, a regional-finance specialist at Fedea, a think-tank. The Basque country ends up with 228% of the adjusted average per person, whereas Valencia gets only 93% and Catalonia 98%. Another big problem is an overall lack of resources. The system as a whole needs €17bn more if the regions are to provide services at the same standard as they did before the crisis, according to Mr Puig. A second difficulty is that even regions governed by the same political party often have different preferences. Most technocrats reckon there should be a cap on the degree of redistribution, as do moderate nationalists in Catalonia. But Andalusia disagrees, so good luck with that,’ (‘Unfair shares,’ article in The Economist Special Report Spain, July 28th 2018, p5).