Catalonia, rich and full?

Indicators such as per capita GDP or exports describe Catalonia as a wealthy nation, particularly within Spain, and among the wealthiest in Europe. Consequently, our complaints about the fiscal deficit are seen as selfish and non-solidary, both in Spain and in Europe. This changes dramatically, however, if we look at more solid indicators instead of using GDP —a measurement so crude that last year it grew by including prostitution. One example would be the regional index of social development that the EU just published, which places Catalonia at the lower end for Spain and Europe, trailing behind Aragon, La Rioja, Navarre, the Basque Country, Madrid, Asturias, and Castilla y León.

To create this index, three main factors are considered: coverage of basic needs, the bases of social welfare, and opportunities for personal development. Basic needs include: nutrition, healthcare, housing, safety, water, and waste disposal. The bases of social welfare are: education, health care, information, communication, and the environment. And opportunities for development include: individual rights, freedom of choice, tolerance, inclusion, and higher education. Not surprisingly, this is a set of factors that correlates closely with the amount and focus of public spending.

Catalonia’s low level ranking in social development is explained by the fact that it is the third highest contributing region of tax revenue to Spain’s coffers, after Madrid and the Balearic Islands, but it ranks tenth on funding received. And when you consider that the low resources we receive have to cover the much higher cost of living in Catalonia (+8.5%), this explains things even better, and makes it easier to understand why Catalan claims have more support among workers and small businesses that among the upper classes.

After all, the groups that pay more taxes and, thus, make greater tax transfers are professional people and employees, via income tax and VAT, and small-business owners, via business taxes. In contrast, large companies and the very wealthy contribute much less in relative terms, nor do they see their personal possibilities for development affected by the shortage of public funding. The clearest example is that of social security, fed by the social contributions from workers, with a cap for salaries higher than 35,000 euros; that is, as happens with union emergency funds, some workers support others while the capital looks on; even worse: it administers it.

Unsurprisingly, the most mature fiscal transfer mechanism in the EU --as a study for possible implementation-- is the unemployment benefit. A kind of insurance for countries with higher unemployment, which is paid for by workers from countries with less. Solidarity between workers that could easily end up in hostility if it's thought that the unemployed here or there were jobless by choice. On the other hand, ending tax evasion by multinational companies isn't even up for discussion, nor is levying a tax on large personal fortunes, using the proceeds to put into action a real investment plan to end unemployment and accelerate an energy transition.
Back in Catalonia, the upper classes don't care at all about the fiscal deficit, and it's alright with them if the Catalan trade surplus with Spain is more than offset by the fiscal deficit that Spain doesn't pay, regardless of the fact that they are two very different magnitudes and that Catalonia ends up with a social development index much lower than regions that receive money from the aforementioned fiscal deficit.

Colonies are also often net exporters and end up with a respectable GDP, although it is the occupying nation that benefits. Unfortunately, Spain does not disclose data that would allow us to ascertain our national income --what part of this GDP belongs to us--, but in any case we know that Catalonia’s GDP is reduced by 8% due to the fiscal deficit; a reduction, however, that the EU doesn't take into account when distributing structural funds based on … GDP. Hopefully, then, the elaboration of this new regional index of social development will serve to modify this distribution criteria, and provide food for thought to the people who still do not understand why Catalonia is packing up and moving out.