Sanchez under pressure to give tax breaks for Catalonia

Prime Minister Pedro Sanchez is under pressure to provide tax breaks to encourage companies to return to Catalonia after an exodus to Madrid following the region’s 2017 independence bid.

Sanchez is under pressure to provide tax breaks to encourage companies to return to Catalonia and a failure to do so could cost him the support of Catalan nationalist parties who prop up the PSOE in government, Spanish daily ABC reported on July 8.

Any tax breaks will rankle Madrid which has benefited from the exit from Barcelona. Other autonomous communities such as Andalucia are also unlikely to be impressed.

“We are not going to allow it. We Madrilenians are not more than anyone, but neither are we less than anyone,” said Miguel Garrido, the president of Madrid’s confederation of businesses.

The Partido Popular’s parliamentary spokesman in Andalucia, Jose Antonio Nieto, has also warned against special treatment for Catalonia.

“Since 2011, the Catalans have been going on and on that Spain is stealing from them when they were the ones who imposed the financing model that they now want to repeal. We are not going to allow any extra privileges for another autonomous community. We, without being destructive or going against the courts, are not going to shut up. We will be good, but not stupid,” Nieto said on

In 2018, Madrid overtook Catalonia as the largest economy of the autonomous regions. From October 2017 to the end of 2020, 3,341 companies changed their address from Catalonia to Madrid.

In the first nine months of 2017, 28 companies left Catalonia each month for Madrid but after the declaration of independence in October 2017, the exit grew to 86 companies per month.

In 2020, foreign investment in Catalonia fell by 22.7 per cent and by 0.8 per cent nationally, but in Madrid foreign investment grew by 23.6 per cent.

Catalonia’s debt is also concerning, the region is 79.1 billion euros in the red and its debt represents more than a quarter of the debts held by all the autonomous regions together.

To add insult to injury, Andalucia now has more self-employed workers than Catalonia. As of May 2021, Andalucia had 557,615 self-employed people compared with 556,945 in Catalonia.

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