Spain takes control of Catalonia’s finances to block referendum

Spain has taken control of Catalonia’s finances to prevent funds being used for an independence referendum it deems illegal, a move that limits the region’s autonomy and puts in doubt the payment of thousands of public workers’ salaries.

“It is a total irresponsibility. They are leading us to an administrative collapse,” Catalonia’s vice president Oriol Junqueras said Monday, adding the measure was “unprecedented”.

Spain’s conservative government announced Friday it would take over the payment of essential services and public workers’ salaries in Catalonia to prevent it from spending money on the referendum slated for October 1.

Catalonia’s pro-separatist government challenged the measure in Spain’s Supreme Court but a court spokeswoman told AFP it was “in force” and would not be suspended while judges rule on its legality.

“It is a de facto suspension of Catalonia’s financial autonomy,” said Alain Cuenca, an expert on the regional financing at the University of Zaragoza who opposes Catalan independence.

Spain’s regions pay taxes to the central government and are then given a quota to spend on health care, education and public infrastructure.

Catalonia, which is roughly the size of Belgium and home to around 7.5 million people, receives about 1.5 billion euros ($1.8 billion) a month from Madrid to cover essential services.

“This means that from now on (Catalan leaders) no longer have their money,” said a spokeswoman for Spain’s budget ministry.

They won’t have the right to carry out any “extra expense” beyond those already foreseen, she added.

‘Less autonomy’

“Does this mean they have less autonomy? Of course! But the seriousness of the measure goes hand in hand with the seriousness of the events,” said Francisco de la Torre, a lawmaker with the centrist Ciudadanos party, an ally of Spanish Prime Minister Mariano Rajoy’s conservative government.

Madrid announced the measure after the Catalan government said it would no longer comply with a request made in July that it provide weekly accounts of its spending to ensure no money was being used to stage the contested referendum.

Junqueras said the freezing of the accounts is a disguised way of taking away Catalonia’s autonomy, a measure which could in principle only take place after a debate and a vote in the Senate, Spain’s upper house of parliament.

“This implies not being able to devote one euro to spending in sectors such as industry, commerce, agriculture, livestock, culture, research, sports, youth, social affairs, housing” which are considered to be non essential, he said.

For Madrid, paying the salaries of the roughly 170,000 employees of the Catalan regional government will not be an easy task.

Spain’s central government will needed their complete details such as bank account info or the number of sick leave days they have in order to calculate the amount they are due.

‘Turn off tap’

Junqueras avoided answering if his government would provide this information, saying only at a news conference on Tuesday that “we will act with our usual normality”.

If it does not, Spain’s central government will “turn off the tap” of financing for the region since this means the Catalan government “is not cooperating, that they don’t want the salaries of public workers to be paid” by Madrid, the budget ministry spokeswoman said.

Joan Escanilla, president of the Catalan branch of Spain’s CSIF civil servants union, said the risk that salaries will be paid late was a “real worry”.

“Think of all that people who have to pay their mortgages, the problems they could have with their banks,” he said.

The Catalan government downplays the risk.

“We have all the resources to face our obligations,” said Junqueras.

About a quarter of Catalonia’s revenues comes directly from certain taxes which it collects itself as well as from university tuition fees.

The Catalan government probably “still has a bit of margin” to pay salaries during the month of September, said Cuenca.

To prevent it from using this money, Madrid has asked banks to control all movements in the accounts and credit cards managed by Catalan leaders.