Thursday, 22 February 2024
BusinessValencian economists, against the Amnesty Law, a 'Catalan quota'... and debt forgiveness

Valencian economists, against the Amnesty Law, a ‘Catalan quota’… and debt forgiveness

The majority of graduates from the Official College of Economists of Valencia (COEV) consider that the main measures of Pedro Sánchez’s investiture pact with the Catalan independence parties will harm the economy, specifically the Amnesty Law and a unique financing system for Catalonia. But in addition, a majority are also opposed to forgive debt to the CCAA in general.

72 percent of economists in the province of Valencia consider that the Amnesty Law and the collection and management of taxes are a “fiscal quota” for Catalonia will be detrimental to the Spanish economywith the focus on the legal uncertaintythe image of the country before foreign investors and tax equality between the autonomous communities.

This is reflected in a survey on the agreements for the investiture of Pedro Sánchez carried out by the Official College of Economists of Valencia (COEV) on its associates, which was presented this Tuesday by the dean of the COEV, Juan José Enríquez, and the vice-dean of the COEV, Alfredo Hernandez.

The study, which collects the opinion of nearly 500 economists of the province of Valencia, affects the economic consequences of the agreements from aspects such as legal security or institutional trust, and focuses on aspects such as debt forgiveness and the collection of 100% of taxes by Catalonia.

Those responsible for the COEV have highlighted that the survey reveals the concern of economists regarding the scenario that opens with the signing of the agreements for the investiture of Pedro Sánchez, which in their opinion represent a “real risk for the Spanish economyderived from occasions of legal and political instability, which can have an impact on the image of Spain in the eyes of foreign investors.”

In that sense, to the question about what effects the Amnesty Law can have on the legal security and predictability of the institutions, 72% of professionals see it as harmful and, of them, 60% rate it as “very harmful”, with a score of between 0 and 1 on its convenience. 13% of those surveyed remain in neutral positions and 15% believe that it will not have negative effects. Among this last group, 10% consider that it can even be beneficial.

Regarding whether the amnesty affects the solvency of the legislative state and the confidence of the institutions – “basic elements when creating a climate for the proper functioning of the economy”, according to Enríquez -, again 72% of economists believe that the agreements will be harmful. Of this 72%, 58% believe that it will be very negative. 13% remain neutral and 16% believe that it can be beneficial.

Likewise, 70% of economists are concerned about the harmful effect on Spain’s image among foreign investors, of which 60% are highly concerned, the dean of the COEV has detailed. 30% believe that it will not be harmful or can be positive.

Enriquez has pointed out that, for the majority of economists, the investiture agreements and measures are an “additional negative element” in a context of deceleration of the Valencian, Spanish and European economy.

Catalan quota

Along the same lines, 72% of the economists surveyed believe that the approval of a tax regime for Catalonia similar to that of the Basque Country or Navarra would harm solidarity between regions, of which 62% consider it very harmful, compared to a 15% maintain neutral opinions and 15% see it as beneficial, according to Hernández.

In similar proportions, 70% consider that this ‘Catalan quota’ would affect the stability of the Spanish tax system; 16% think that it will not involve changes and nearly 16% believe that it can benefit the stability of the system.

Furthermore, 69% of the province’s economists consider that this measure will have negative consequences for competition between communities; 17% believe that this change can benefit competition and 12% have a neutral position.

Likewise, 69% foresee that the measure will harm the coverage of expenses of the Central Administration, with 56% of them seeing it as highly harmful. 16% do not foresee a significant impact and 15% consider it positive.

In the words of the dean of the COEV, “the possibility of Catalonia collecting 100% of the taxes in its territory would mean a division of the state treasury, with great risks to the effectiveness of the fight against tax fraud.”

Debt removal

The members have also been asked about their degree of agreement with the fact that a part of the debt that Catalonia has with the Autonomous Liquidity Fund (FLA), estimated at 15,000 million euros, can be forgiven. A decision that 58% consider inadmissible because they do not consider that this is a community that is in a situation of underfinancing.

On the other hand, 68% of those surveyed, asked if the State should forgive the debt of all the autonomies, regardless of its amount and origin, are opposed to this possibility, although 53 admit that this decision could be adopted in the case of underfinanced communities, such as the Valencian Community and the Murcia Region.

On the other hand, 61% are opposed to canceling the debt of the autonomous communities because they consider that they represent an incentive to spend and borrow.

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