Geoscience Reference
In-Depth Information
majority in Madrid. In 1993, the centripetal mechanisms originally devised
during the transition fail to deliver for the first time. The PSOE falls short of
16 seats to reach a sufficient majority and engages in negotiations with Catalan
nationalists. Two themes dominated Felipe Gonzalez's speech requesting Par-
liament's support: reopening the process of legislative implementation of the
constitutions of Catalonia and the Basque Country, and pursuing fiscal core-
sponsibility between levels of government.
19
While the concessions approved in
October 1993 were not all that radical, they shaped future interactions (Bosch
and Dur an
2005
). Allowing ACs to retain 15% of the payments made by their
residents set the precedent that the territorial organization of the income tax
was negotiable.
The elections of 1996 yielded another minority government, this time led
by the conservative party (PP) and with a larger margin to fill through agree-
ments with Catalan (CiU) and Basque nationalists (PNV). Interestingly, the
same party that accused the PSOE of rendering Spain for sale during the pre-
vious term proved much more receptive towards the nationalists' demands
for fiscal autonomy in 1996-1997. For the first time, ACs of the so-called
“common regime” had the option to assume legislative capacity on the income
tax, as detailed in
Table 7.5
. CiU also extracted additional funds to cover
the expenditure needs generated by the decentralized provision of health care,
which Catalonia had had since 1981. In addition, the PNV extracted a num-
ber of important concessions. In particular, they obtained additional funding
for vocational training policies and support for a renewal of the Cupo and
the Concierto (the Basque Country and Navarra's special fiscal arrangements)
in the context of which the Basque government's fiscal autonomy increased
significantly.
20
The political agreements in 1993 and 1996 reflect the logic behind the inter-
play between economic geography and political representation: the distribu-
tive consequences of existing fiscal structures (
Figures 7.2
. and
7.3
) bolster the
demands for fiscal autonomy by net contributors on both interregional trans-
fers and Social Security. In turn, these demands translate into actual changes
in the fiscal structure only when national parties fail to obtain a majority in
19
Source:
Spanish Parliament, Diario de Sesiones. To explain the privileged position of nationalist
parties in the period 1993 to 1996, one must understand that their electoral success is a
necessary, though not sufficient, condition given the fact that the sum of the votes of the
PSOE and IU would be enough to support a stable government (see
Table 7.2
). The enormous
difference between the socialists and the communists regarding the European Union process
and the guidelines of economic policy must be brought into the picture in order to understand
why the CiU nationalists were able to achieve a much higher political capacity to impose their
preferences. At the same time, however, the feasibility of alternative coalitions limited de facto
the demands by Catalan nationalists. For further references see Linz and Montero (
1999
); and
Maravall (
1999
: 154-197).
20
In particular, they gained full control over: income tax (with freedom to deviate up to 20%
from the tariffs set by the central government), special taxes (tobacco and alcohol once the state
monopoly ceased to exist), environmental regulations, and the issuing of academic degrees. See
Ley 38/97 de Modificacion del Concierto Economico Vasco.
