ERC stands its ground and closes the door to budget negotiations until the government gives Catalonia 100% of its personal income tax.

The main partner in the coalition government between PSOE and Sumar, ERC, has just blown up the roadmap for trying to approve the 2026 Budget. The president of the pro-independence party, Oriol Junqueras, made it clear this Monday that Esquerra will not sit down to negotiate either the General State Budget or the Budget of the Generalitat of Catalonia until Salvador Illa and Pedro Sánchez explicitly support a legal change to recognize Catalonia's ability to collect 100% of its income tax.

"As long as there is no progress on relevant issues such as the financing model, there will be no budget negotiations," Junqueras stressed, clarifying that this time neither verbal commitments nor documents of intent will be valid. This week, the ERC (Republican Left) will present a bill in Congress to promote the reform of three laws, including the Organic Law on the Financing of the Autonomous Communities (Lofca), which, in its own words, will regulate the "legal authorization" for the Generalitat (Catalan Government) to collect the entire Income Tax, the most important tax in the Spanish tax system, which is currently collected by the Tax Agency and whose revenue is ceded 50% to the autonomous communities.

"All we're asking is that the PSOE and the PSC fulfill what they promised to do, what they agreed to, and what seemed good to them a few months ago," Oriol Junqueras emphasized in a press conference attended by a visibly uncomfortable Gabriel Rufián, the spokesperson for Esquerra in the Congress of Deputies.

In a previous briefing, ERC sources acknowledged to journalists that processing this initiative could take up to six months , which would represent a significant disruption to the timeline the government had set for trying to secure a new budget in 2026. For Junqueras, this doesn't necessarily pose a problem. "The budget can be approved at the end of the year or come into effect at the beginning of the following year; it has already happened before," he suggested.

Junqueras has acknowledged that they have presented this bill alone due to the lack of agreement with the PSC and PSOE to push this initiative forward. The initiative is no longer content with the Generalitat keeping 100% of the revenue generated by personal income tax in Catalonia, but instead demands that the law be changed to recognize the Generalitat's ability to collect the entire tax on its own.

According to official data from the Tax Agency, in 2024 the Special Delegation of Catalonia collected €27.59 billion in Income Tax, of which approximately half went to the coffers of the Generalitat. According to Junqueras, assuming full responsibility for the collection of Personal Income Tax would represent a qualitative leap for the Catalan Tax Agency, which would go from collecting around €5 billion to more than €30 billion.