fiscal balances

Fiscal balances: an issue on the table

Marta Espasa's picture

A fiscal balance is a tool that measures the central government's redistribution impact among the Autonomous Communities. That is to say, this allows one to know the expenditure made by the central government in a given territory and the fiscal revenue obtained from that territory. The fiscal balance is the difference between the expenditure allocated and the revenue collected by the central government in a specific territory. Therefore, when an Autonomous Community posts a fiscal deficit, it means that the revenue the central government obtains from that territory is higher than the expenditure it makes. At the same time, a fiscal surplus indicates that the revenue obtained is lower than the expenditure.

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The fiscal drainage of Catalonia

Núria Bosch's picture

Catalonia suffers from a significant fiscal drainage towards Spain in the form of a large fiscal deficit. This is the difference between the Central Government’s public sector spending in Catalonia and the resources extracted from this Autonomous Community, mainly through taxation, by the Central Government.

Fiscal deficit data, all calculated using the same methodology, is available from 1986 until 2011. The average for 1986-2011 is 8% of GDP with a standard deviation around this average of only 0.9. Therefore, one can speak of a structural fiscal deficit that affects the Catalan economy recurrently.

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The Economic Relations between Spain and Catalunya

Vicenç Ferrer's picture

A Marriage of Convenience or an Impending Divorce?

Spain’s economic crisis has given added impetus to the growing sentiment for Catalan independence within this region, as evidenced by the emergence of new independence parties and increasing voices demanding independence, as seen in the massive march of July 10, 2010 in Barcelona. The economic crisis has not started this movement.  But by making the economic problems in Spain more immediate and deeper and hitting more people and by making the economic relations between the autonomic governments and the central government more visible, it has mightily contributed to it, along with recently adverse rulings on the Catalan Constitution, or the “Estatut” (not the subject of this article).

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