CNA. Catalonia contributed with 8.5% of its GDP to infrastructures and services in the rest of Spain in 2010.

Catalonia contributed with 8.5% of its GDP to infrastructures and services in the rest of Spain in 2010

Barcelona (ACN).- In 2010 the Spanish Government took €16.54 billion away from the taxes and fees paid in Catalonia and redistributed the money to the rest of Spain and abroad, while the Catalan Government was significantly under-budgeted and had a €8.3 billion deficit. On Tuesday, the Catalan Government posted the so-called fiscal balances for 2010, which show the difference between the money paid in Catalonia in taxes and fees to the Spanish Government and what comes back in the form of funds, services and infrastructure. Using the monetary-flow formula, which takes into account investments and transfers made directly in the Catalan territory, in 2010 Catalonia had a fiscal deficit representing 8.5% of its GDP. This means that Catalonia had a €16.54 billion deficit in a single year, which is more than half the budget of the Catalan Government. Using the benefit formula, which also takes into account investments made in other parts of Spain that theoretically also benefit Catalan citizens – such as the army, Madrid’s Prado Museum, the civil-servants based in the Spanish Capital and the high-speed railway between Seville and Ciudad Real – Catalonia had a fiscal deficit of 5.8% of its GDP, representing €11.26 billion. The Catalan Finance Minister, Andreu Mas-Colell – who is a former Harvard and Berkeley Economics Professor – stated that both formulas “are complementary” since they measure different things, but he finds the monetary flow formula to be “closer to the reality” it evaluates since “it is difficult to quantify in which way an investment made in Madrid’s Prado Museum benefits Catalonia”, as “an investment in the Louvre Museum” could also theoretically have an indirect effect. In addition he stated that the monetary flow formula, which is much more direct and simpler to calculate, is particularly relevant “in times of economic crisis and high unemployment”, since it takes into account all the pensions and unemployment benefits. Mas-Colell emphasised that the difference between the money Catalan tax payers bring in to the Spanish Treasury and what they receive back “is a negative shock”.

 

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Posted on May 23, 2013, in BY COUNTRY, BY DATE, BY LANGUAGE, BY SOURCE, Catalan News Agency, Catalonia, English, May 2013. Bookmark the permalink. Leave a comment.

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