Reconciliation Through Fiscal Autonomy

In the Catalan regional elections, pro-independence parties were once again able to secure a majority in the Catalan parliament. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW), Mannheim, comments on the election results.

“The results of the election force the Spanish government to finally take the Catalan voters’ desire for greater fiscal autonomy seriously. Research findings have shown that a high unilateral financial burden on individual regions puts a severe strain on national unity, especially in countries where there are strong regional identities. The Spanish government will not be able to solve this conflict through legal action.

Instead, it would be important to work towards a policy of reconciliation by strengthening Catalonia’s tax autonomy and capping the net financial burden on the region. It is difficult to understand why Spain does not grant Catalonia the same fiscal autonomy enjoyed by the Basque Country and Navarra. If the Spanish government does not finally engage in serious negotiations about Catalonia’s fiscal autonomy, Spain’s economy could be expose to substantial damage, putting at risk the Eurozone as a whole.”

For further information please contact:

Prof. Dr. Friedrich Heinemann, Phone +49 (0)621/1235-149, E-mail friedrich.heinemann@zew.de