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Spain tightens funding terms for Catalonia amid secession push

Published 20/11/2015, 15:57
© Reuters. Junts Pel Si (Together For Yes) supporters wear a pro-independence "Estelada" shirts after a regional parliamentary election in Barcelona

MADRID (Reuters) - The Spanish government said on Friday it would tighten funding conditions for Catalonia as the northeastern region's parliament looks to press ahead with an independence campaign.

The central government said it would unlock 3 billion euros (2.10 billion pound) in extra cash for Catalonia - a sizeable chunk of 7.9 billion euros in special funds being distributed among 15 of the country's autonomous regions.

But it is attaching stricter conditions to the money going to Catalonia than anywhere else. Treasury Minister Cristobal Montoro demanded monthly budget updates from Barcelona and a pledge that the funds would only be used to keep public services ticking over.

"These conditions guarantee that not a single euro will be used (to finance) separatist whims," he told a news conference following a weekly cabinet meeting, adding the funds would only be released bit by bit.

Spain's Constitutional Court blocked Catalonia's secession bid earlier this month, deepening a stand-off between Barcelona and Madrid over the long-simmering independence movement weeks before a national election.

In September, parties favouring a split from Spain won a majority of seats in the Catalan assembly, which last week passed a resolution setting out a plan to establish a republic within 18 months.

Meanwhile centre-right Prime Minister Mariano Rajoy's People's Party (PP), gearing up for what promises to be a closely-fought election, has insisted on a tough stance with Catalonia, ruling out any prospect of a breakaway.

The government's stricter line with financing for the region also comes after ratings agency Fitch last week downgraded Catalonia in response to the parliamentary resolution.

Funding rows have long been a source of tension between the central government and Catalonia, and the independence movement, in a region with its own language and culture, swelled during a recent recession.

Catalonia produces about a fifth of Spain's economic output, though it has been largely dependent on cheap financing from the state since the downturn complicated its access to markets. It has taken nearly 53 billion euros from various government schemes since 2012, far more than any other region.

© Reuters. Junts Pel Si (Together For Yes) supporters wear a pro-independence "Estelada" shirts after a regional parliamentary election in Barcelona

Analysts generally believe Catalonia is still unlikely to break away, and may end up negotiating more autonomy instead.

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