Catalonia’s Republican Left May Resist Austerity After Vote

The Catalan Republican Left, the biggest gainer in yesterday’s regional election, may use its leverage to reverse the austerity policies that Spain and the European Union have imposed on Catalonia and raise bank taxes.

ERC, as the party is known, will push for a new tax on banks to help fund an increase in public investment and a tax cut for the workers, leader Oriol Junqueras said at press conference in Barcelona today.

“Austerity is a mistake,” Junqueras said. “We insist on the need for a change in the budget policies.”

Junqueras’s party holds the balance of power in Catalonia after doubling the number of seats it holds in the regional parliament and will demand Catalan President Artur Mas sets out a clear timetable for a referendum on independence as a condition for any support, he said. ERC’s advances follow a surge in support for the anti-bailout Syriza party in Greece in a sign that voters are turning against the austerity policies that the EU has prescribed for southern Europe.

ERC could achieve its goals by supporting Mas from the opposition instead of joining a coalition, Junqueras said.

The party gained at the expense of Mas’s Convergencia i Unio group, which stepped up pro-independence rhetoric as the economy sputtered. Mas’s party, known as CiU, still has the most lawmakers in the 135-seat assembly after falling to 50 seats from 62. The ERC won 21 seats, up from 10.

Leader’s Call

“Those who have come out of this most strengthened are those who spoke most explicitly of independence,” Junqueras told cheering supporters in Barcelona last night.

Junqueras was greeted with cheers and chants of “In-de- pen-dence” from his supporters. After his address, the crowd raised their clenched fists as he led them in a rendition of the Catalan anthem, which is about driving away “conceited and contemptuous” intruders.

Mas has blamed tax transfers to the rest of Spain for the area’s financial woes and has pushed for independent tax collection. The region transfers 15 billion euros ($19.5 billion), or 8 percent of its output.

Since 2010 elections, Mas, whose party’s pro-business economic policies are in line with those of Spanish Prime Minister Mariano Rajoy, led a minority government. Rajoy’s People’s Party has backed his austerity budgets. The 2013 budget will be one of the new government’s first tasks.

‘New Taxes’

“Politicians have been co-opted by financial interests,” Joan Tarda, an ERC lawmaker in the national parliament in Madrid, said early today in an interview at the party’s election night headquarters in Barcelona. “We need to put controls on speculative activity through new taxes, through green taxes. We need a different policy on the revenue side.”

Debts acquired as a result of speculative activity may be “illegitimate” and borrowers should reach a “settlement” with their creditors, he said.

The 7.5 million Catalans make up 16 percent of the Spanish population and last year contributed 19 percent of the country’s economic output. Madrid is the second-biggest regional economy, with 18 percent of national output. Catalonia, the country’s most-indebted region, was cut to junk by Moody’s Investors Service on Aug. 31.

The fallout from Europe’s debt crisis has shut Catalonia out of financial markets, making it more dependent on the central government, while at the same time fueling the campaign to break away. Mas, who says Catalonia can have a “brilliant” future alone rather than a “gray” one as part of Spain, was forced to ask Rajoy for a 5 billion-euro lifeline this year.

To contact the reporter on this story: Ben Sills in Barcelona at

To contact the editor responsible for this story: James Hertling at

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