CATALAN ELECTIONS 2021

An uncertain scenario: The PSC wins, but independence parties obtain a majority in votes and seats

14 February 2021 NO CLEAR SCENARIO

In an election that was both unusual and exceptional, the results from the polls on 14th February in Catalonia have thrown up a scenario similar to the one that existed previously, in which only the protagonists have changed. The ‘Illa effect’ has been successful and the PSC have won the most votes, although they have the same number of seats as ERC, who were finally able to outperform the party of and emerge as the leading independence party in Catalonia.

Once again, everything seems to point to Catalonia assuming a central role in Spanish politics, especially now that independence parties have broken the ceiling of 50% of electoral votes for the first time, despite the turnout falling by more than 25 points. Although Pedro Sánchez has been vindicated in choosing Illa as the candidate, coupled with the collapse of the Partido Popular, which will weaken Pablo Casado’s position, the formation of a pro-independence government will affect the stability of the central government.

JxC 34 11 ERC 32 ERC 33 JxCAT 32 CUP 9 PSC 17 ECP 8 Cs 36 PSC 33 ECP 8 Cs 6 2017 CUP 4 14-F PP 4 PP 3

The key points

• For the first time, the independence parties have • The serious setback for the Partido Popular, who won more than 50% of the votes in an election, have lost the option to form their own although participation has fallen. parliamentary group, is a severe test for the

• The PSC has enjoyed a considerable increase in leadership of Pablo Casado. seats and has clearly won the election, • Ciudadanos emerge as the biggest losers of the strengthening the leadership of Pedro Sánchez night and the leadership of Inés Arrimadas will be through his backing of Salvador Illa. under scrutiny after the loss of 30 seats.

• ERC has emerged as the majority party of the • The CUP win 5 more seats and once again will be independence movement, beating JxCAT in votes decisive in the formation of a pro-independence and seats and confirming Pere Aragonés as the government.

front runner to become President of the • En Comú Podem managed to confound the worst Generalitat. forecasts and mantain the same number of seats.

• VOX are the surprise, winning 11 seats and • JxCAT have dealt a final blow to the legacy of CDC: achieving representation in all four Catalan PDECat failed to win any parliamentary provinces. representation at all. 2

RADAR 3R EVERYTHING IS ALMOST THE SAME

Catalonia at the crossroads A draw between JxCAT and JxCAT Although the independence parties have crossed ERC the threshold of 50% of the votes for the first time, PSC electoral law favours these parties who obtain most of their seats in the least populated provinces.

ERC The elections of 14F reveal a curious map of Catalonia in which the PSC wins in Barcelona, the most populous province, while JxCAT and ERC win Independence: in Girona and Tarragona respectively, obtaining equal numbers of seats in Leida. YES: 74 NO: 61

Possible scenarios

1. Pact between independence parties: ERC + JxCat + CUP Pere Aragonés would be the President, with the support of Junts and the CUP, with possible support from ECP. However, should JxCat or the CUP insist on including demands in the negotiations that ERC do not currently contemplate, such as a unilateral referendum or declaration of independence, this may prevent them from reaching an agreement to form a government.

2. Pact led by Salvador Illa: PSC + ERC + ECP Salvador Illa has declared that he will bid to be invested as President, although there is little real chance of a pact with ERC, as both parties openly stated during the election campaign. This is the scenario that would benefit Pedro Sánchez the most, because it would provide greater stability for the national government.

3. Repetition of the elections The mutual declaration of red lines and incompatible demands during negotiations may block the formation of a government and lead to new elections. This is unlikely, because the party responsible for the repetition will probably be punished by the weary Catalan electorate, who have had five regional elections since 2010.

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RADAR 3R THE REACTIONS

Salvador Illa: “I understand the clear victory of the PSC in votes tonight to mean that the people want to move on. A change to a new page”. After announcing that he will bid for the presidency, he stated that today was a great step forward, but only the first step because change was unstoppable in Catalonia. "Yes, Catalonia has said that it wants to be Spanish. There is no alternative to a reconciliation, that is what the polls have said today” he claimed.

Pere Aragonés: "I am sending a message to Sánchez, it is time to decide on a referendum without repression“. The leader of Esquerra said that the citizens of Catalonia “have decided that they want an amnesty, self-determination and to leave this crisis behind”, so they can create a new era. Aragonés has confirmed that he will bid to become president.

Laura Borràs emphasised that the most important result of the elections this Sunday is “the great victory of independence, in votes as well as seats, with over 50%”. She stressed that “we have always talked in terms of the country and this majority exists. For the first time, we have crossed the limit of 50% of the vote, and this will have political consequences.”

Ignacio Garriga has celebrated the arrival of VOX in the parliament by saying that “ we have won a battle, but it is not a victory” and that the problems of Catalonia are still unresolved. In this context, he announced that he would demand “an end to illegal immigration, that Spanish be spoken in schools and to recover the freedom that has been taken from us”.

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RADAR 3R THE REACTIONS

Dolors Sabater: “This new cycle has to be marked by a majority that is pro-independence and left wing”. The candidate for the CUP announced that she will be addressing ERC, JxCAT and ECP in order to establish the terms for a pact based on diverse points such as an amnesty and “the end of repression”, a binding referendum, an emergency plan and social policies, and a plan for ecological transition.

Jessica Albiach argued for change and pointed out that “there is a clear left-wing majority that cannot bear the actions of ERC and Junts any more”, claiming that “the government of the left is possible”. In this sense, the spokeswoman for the Comuns volunteered to act as mediator to establish a three-party left-wing government.

Carlos Carrizosa, echoing the statements made by his leader, Inés Arrimadas, blamed the party’s losses on the low turnout and affirmed that they would “defend all those who consider themselves Catalan, Spanish and European”. His party will continue “to do the same as it has done since 2006: defend the constituion from the political centre, to fight with absolute resolve for freedom in Catalonia and democracy.”

Alejandro Fernández has defined the election results as "very bad, because we have not achieved the goals we set ourselves at the start, which was to grow and have our own parliamentary group.” The candidate for the Popular Party was tranquil and serene: “I continue to believe that we need a liberal government that supports the constitution and Europe. This space exists, but today it has stayed at home”.

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RADAR 3R ANALYSIS OF THE ECONOMIC PROGRAMMES

PSC: Revision of the model for financing Autonomous Communities

The most significant promise for these elections is a review of the current model for regional financing. They also propose the creation of a “Federal” Tax Agency, a consortium created by the central and regional governments to handle all the taxes collected and “write off part of the debt” of the regions that have been most severely affected by the current system.

Esquerra Republicana: “Economic reconstruction of the Catalan Republic”

The goal of ERC’s economic programme is the “reconstruction of the Catalan Republic”. To achieve this, it proposes the creation of a mixed public-private fund that would allow the government to invest and take Junts Per Catalunya: Priority for Catalan businesses decisions about participating in companies with great JxCAT wants to exclude the companies of the Ibex 35 from potential for the future. They are also committed to public contracts with the Generalitat as a way of giving launching “a complementary currency” to collaborate priority to Catalan companies. They are also committed with Local Councils and boost local trade, setting up a to “increasing the Generalitat’s financial sovereignty by cluster of financial services and levying a new tax on issuing bonds on the stock market” and for Catalonia to online sales, as well as backing an ethical bank and the access the European Stability Mechanism to finance its labelling of products in Catalan. support to overcome the COVID-19 crisis. Among other measures, they are considering levying tax on online platforms such as Amazon and backing the Catalan Space Agency.

VOX: Drastic reduction in taxes

Although VOX has not published any electoral manifesto, it announced a series of measures in December that included the “drastic reduction of all the taxes that are stifling Catalans”, which includes eliminating 99% of the tax on Inheritance and Donations and personal wealth.

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RADAR 3R ANALYSIS OF THE ECONOMIC PROGRAMMES

CUP: General increase in tax for companies, investment funds and large property holders

The CUP proposes levying a tax rate of 3% on all business profits above five million euros. This measure will also affect the so-called “vulture funds”, property transactions worth more than a million euros and large property holders (including people with more than three flats or whose properties exceed a total floor space of 700 square metres). They also propose the creation of a tax to finance the extra cost arising from COVID-19, applying a rate of 1% to those whose wealth is between 1 and 10 million euros, 2% for those between 10 and 50 million, and 3% for those with more than 50.

En Comú Podem: Raising taxes to the average levels Ciudadanos: Action plan to bring back businesses of the EU Ciudadanos are proposing an action plan to bring back En Comú Podem propose to raise taxes for the wealthiest the more than 7000 companies that shifted their among the population, to bring them in line with the headquarters out of the region after the referendum of 1 average EU rates through modification of taxes on October 2017, to start “a new period for all Catalans that Inheritance, Donations and personal wealth, and by brings ‘the process’ to an end”. eliminating tax breaks”. They also propose setting up a helpline offering 75% They also promise to “apply a tax on luxury items”, to direct aid for lost business for SMEs and the self-employed reverse the lowering of regional taxes paid by casinos and affected by the restrictions associated with COVID-19 and to fight against “tax dumping”. other measures for the sectors which have been most affected, such as hotels, tourism and nightlife.

Partido Popular: Lower taxes in Catalonia

The Partido Popular promises to lower the taxes in Catalonia. To achieve this, it is committed to reducing 99% of the tax on Inheritance and Donations and transfers between married couples and close relatives. They also propose to eliminate the tax on soft drinks and other taxes raised by the Generalitat and to raise the exemption threshold for wealth tax from 500,000 to 700,000 euros.

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