The Government had already taken control of all regional funding funds received by Generalitat of Catalonia on 16 September. When this Saturday is launched, procedure that will activate intervention of Autonomous Community, Ministry of Finance is going to take one more step: it ends up taking management of all own taxes that are competence of autonomy and that until now They were still in government's hands.
So far, Hacienda had already retained and managed transfer of some 1.4 billion euros a month entered by Generalitat of Catalonia by financing system. That accounts for about 80% of its resources. The remaining 20% consists of revenues from taxes such as succession, donations, equity, gambling fees or documented legal activities and patrimonial transmissions, among ors. The government of Mariano Rajoy had already imposed freezing of all non-essential items, controlled disbursements through bank and required to certify m an auditor. In this way, I had expenses under control. But now with application of article 155 of Constitution, reins will be taken completely. The Generalitat will not even be responsible for management of strictly autonomous taxation.
The agreement of Council of Ministers adopted on Saturday establishes that measures shall be taken to "ensure that revenues to be collected or received by any title to autonomous community, to its agencies, entities and dependent or subsidiaries" Of same and its public sector, are not destined to activities or purposes linked or related to secessionist process that motivates this agreement or that contravene measures contained rein, "reads legal document that activates article 155. In principle, Hacienda does not plan to send members of General intervention to Barcelona, equivalent of ir men in black. For moment, he hopes to be able to protect accounts from Madrid and trust cooperation of Generalitat's comptroller, as he has done so far. With this intervention of Catalan finances, tax agency also seeks to ensure collection, avoiding acts of fiscal disobedience.Learn More
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On or hand, in its explanatory statement, executive insists that " purported independence would generate a series of economic effects of impact and serious magnitudes". The text warns that a secesionada Catalonia would be outside European Union and World Trade Organization. This would entail application of tariffs and customs controls for an economy "whose foreign trade accounts for 70% of GDP," he underlines.
In financial field, Government warns that independence would leave Catalonia outside purview of European Central Bank. "This would lead to fact that, as is already happening today, credit institutions reubicasen out of Catalonia." The outflow of capitals along with worsening balance of balance of trade in Catalonia, would result in an outflow of euros to rest of Spain and world that would prevent use of de facto of euro as currency in Catalonia. Even creation of a single currency and a central bank would be unviable because of high level of public deficit. Monetary expansion, disproportionate inflation and credit crunch, with consequent effects on consumption and investment, would be irreparably stressed by Council of Ministers ' agreement.
As for finances of new Catalan state, executive argues that "budgetary tensions would be evident". The capacity to have income would be greatly diminished "in a context of economic contraction, foreseeable displacement of people and social domiciles, and lack of transfers from Spain and European Union," he explains. "It would involve isolating an economy that is now fully integrated in Spain, EU and world." It would be isolation of financial, capital and commercial flows. This would lead to an impoverishment of economy of Catalonia from 25% to 30%, resulting in an unsustainable economic situation, he concludes.