Outrage in Catalonia after Spain cuts regional deficit targets and denies compensation for VAT rise

Barcelona (ACN).- The relationship between the Catalan and Spanish governments is at a “turning point” after a “bad” meeting in Madrid on Thursday, as government officials put it. The summit between the Spanish minister Cristóbal Montoro and the ministers for the Economy of the 17 autonomous communities in Spain was a “defeat” for Catalonia, according to the Catalan minister Andreu Mas-Colell. In Madrid, Montoro announced a new cut in the regional deficit targets, from 1,1% to 0,5% for 2013, and from 1% to only 0,1% the year after. This comes after Brussels allowed Spain to achieve its own deficit targets one year later than previously stated, thus giving Madrid more time to meet its obligations.

But the Spanish government of Mariano Rajoy did not want to apply to the regions the same flexibility that Brussels applied to him. On the contrary, he decided to harden the regional deficit targets in a move that outraged Catalan minister Andreu Mas-Colell and forced him to vote ‘no’ to the new objectives. Catalonia has been implementing harsh austerity measures since 2010, including cuts into public workers salaries and significant reductions in Public Health and Education spending. The government announced in May a new round of austerity measures – the third- that now would probably not be enough to meet the new deficit targets. If Catalonia or any other region does not comply with the dictates of Madrid, it faces the possibility of a political intervention from the Spanish government. Mas-Colell said on Friday that he is ready to speak directly to Brussels in order to negotiate the Catalan economical situation if such an intervention was to become reality.
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