As the deadline to form a new government in Spain approaches, the ‘Catalan question’ has emerged as the key issue in preventing an agreement to form a coalition and break nine weeks of deadlock in the Spanish political system.
The two options on the table are the formation of a left-wing coalition led by PSOE and supported by Podemos and minor parties, or alternatively a re-run of the General Election. But, with a second ballot expected to return a similar distribution of parliamentary seats, the formation of a coalition appears the only meaningful route for Spanish politics. The biggest stumbling block, however, is that the socialist PSOE is against an independence referendum in Catalonia, while Podemos strongly supports it.
A major problem is that a legally binding independence referendum in Catalonia is, under the Constitution, illegal for two main reasons. Firstly, the Constitution defines Spain as an indivisible nation. Secondly, also according to the Constitution, sovereignty lies in the Spanish people and cannot therefore be split. The Constitution can, of course, be changed. But in practical terms this would be virtually impossible as very large qualified majorities (which are non-existent at the moment) would be required in Parliament to pass the necessary changes.
So, if there are insurmountable barrier to changing the Constitution to allow a referendum, what are the alternatives? If there were the political will, there is a number of initiatives which would involve the reform of non-essential elements of the Constitution, (hence would stand a better chance to be passed), which would accommodate some of the Catalan nationalists’ demands – or at least those of the more moderate campaigners.
Progress towards federalism
Spain is already a federal country in all but the name. However, there is still room to progress towards a more federal Constitution. This could be done through granting greater Constitutional protection to regional competences over areas such as language, highly sensitive in Catalonia, and/or the reform of the Senate to make it a real chamber of regional representation (at the moment it only plays a minor role in the legislative process).
Reform of the regional finance system
A matter of great contention between the central and Catalan regional governments is the distribution of funds amongst Spanish regions. The current system is based on the principle of solidarity (amongst people and territories), according which better-off regions subsidise poorer ones. The aim is twofold – citizens receive the same level of public services regardless of the place of residence, and poorer regions can eventually catch up with wealthier territories.
The key issue is that wealthier regions such as Catalonia (the third region in terms of per capita contribution to the regional finance system, after the region of Madrid (first) and the Balearic Islands (second)) end up being allocated fewer funds than other regions which contribute less to the system (always in relative terms).
A possible solution to this problem would be introduction of a regional finance system based on the principle of (fiscal) ordinality. According to this principle, wealthier territories would still subsidise poorer regions but in the final ranking, the third largest contributor, for instance, would always be the third largest receiver of funds.
National and regional referendums
The above mentioned reforms, if adopted by Parliament, would then need to be voted on, in a referendum, by all Spaniards. In a second stage (if the result of the referendum were positive), Catalan people would vote, also in a referendum, the reform of their Estatut (a kind of regional constitution) in accordance with the approved constitutional reforms.
The proposed constitutional reforms would not be easily approved, as they would be likely opposed by radical Spanish and Catalan nationalists. However, any agreement to resolve the current deadlocked situation would necessarily involve concessions from both blocs. Will the next Spanish government have the political courage to carry out these reforms?