The New York Times
MADRID — Spain’s prime minister, Mariano Rajoy, already under pressure from his European counterparts to clean up Spain’s banks and public finances, failed on Thursday to ease what has recently turned into his biggest domestic political challenge — a separatist push by the nation’s most economically powerful region, Catalonia.
Catalonia’s leader, Artur Mas, accused Mr. Rajoy of losing a “historic opportunity” to safeguard the relationship between his region and the rest of Spain, after they could not reach agreement on a new tax revenue redistribution plan. Mr. Mas warned that Mr. Rajoy’s refusal to negotiate any tax changes was likely to increase resentment toward the Madrid government among Catalans, especially after hundreds of thousands of them gathered for a pro-independence rally in Barcelona on Sept. 11, the anniversary of a Catalan defeat at the hands of Spanish troops in 1714.
“The people and society of Catalonia are on the move, as we have seen on Sept. 11, and not willing to accept that our future will be gray when it could be more brilliant,” Mr. Mas said at a news conference here.
Just as Mr. Rajoy’s government finds itself on the front lines of the euro crisis, Catalonia, which accounts for almost a fifth of Spain’s economic output, has moved to the fore of Mr. Rajoy’s domestic challenges.
“The demands from Catalonia have developed a lot faster than anybody expected,” said Jordi Alberich, director general of the Cercle d’Economia, a Barcelona business organization. “A difficult crisis situation for Mr. Rajoy has just now got a lot more complex.”
Mr. Mas insisted on Thursday that his fallout with Mr. Rajoy was not only over taxation and money. Yet Spain’s deepening recession and budget cuts have helped shift separatism from fringe to mainstream thinking among Catalan politicians and business leaders.
As fears over a breakup have expanded in the national consciousness, King Juan Carlos, in an unusual political foray, this week wrote a letter urging national unity, which was posted on the royal palace’s Web site.
Mr. Rajoy did not make any statement after Thursday’s meeting with Mr. Mas. A day earlier, however, he called on Spaniards to close ranks in the midst of a crisis. “This is not the moment to generate more problems or political instability,” he told Parliament.
The relationship between Mr. Rajoy and the nation’s regions, which have had their own budget dramas, was already strained because of the economic crisis and his insistence that they display greater fiscal discipline in return for emergency help.
“The effort that the central government is making in terms of reducing spending is inferior to what it is asking the regions to make,” Mr. Mas argued Thursday. “The sacrifice that must be done must be shared in a fairer and more balanced manner.”
Over the past decade, however, Catalonia’s own financial mismanagement has helped make it by far Spain’s most indebted region, with $54 billion of the $181 billion of debt owed by the 17 regional governments.
Unable to issue more debt to private investors or financial markets, Catalonia was forced last month to request $6.5 billion in emergency aid from Madrid in order to meet its refinancing obligations. Catalonia’s financial plight has led an increasing number of Catalans to conclude that their recovery prospects would be enhanced by loosening, or even breaking, ties with the rest of Spain.
Mr. Mas had hoped on Thursday to persuade Mr. Rajoy to allow Catalonia to reduce its contribution to a fiscal system that redistributes part of the tax revenue to other, poorer regions. Mr. Mas said that Mr. Rajoy’s response was “a no without nuances.”
With a $260 billion economy that is roughly the size of Portugal’s, Catalonia and its 7.5 million inhabitants — 16 percent of the Spanish population — have long been an engine for the country as a whole. The region, which has its own language and distinctive culture, blends a powerful financial services sector, led by La Caixa, the Barcelona bank, with a strong industrial base ranging from textiles and automobile manufacturing to biotechnology.
The 1992 Olympics, in part financed by the Madrid government, helped transform Barcelona into one of Europe’s most visited cities. Even in the midst of the financial crisis, the city expects to have 7.5 million tourists this year, compared with 1 million before the games.
Although Catalonia is not set to hold another regional election until 2014, the dispute with Mr. Rajoy is expected to persuade Mr. Mas to call another election before the end of the year, in the hope that his Convergencia i Unió party could capitalize on recent opinion polls showing a rising majority in favor of independence.
But Mr. Mas has so far spoken of seeking only fiscal sovereignty rather than full independence.
“Whatever path Catalonia follows, it needs to be European and about dialogue and doing things together, either within Spain or with Spain,” he said on Thursday.