A new report, dubbed the Fènix report, by a group of prominent economists warns that Catalonia's current economic model is unsustainable and could lead to an unprecedented social crisis. The study, which focuses on the Principality, suggests that while Catalonia is experiencing growth, this growth is making the region poorer.
The report highlights a contradiction: Catalonia is growing but becoming poorer. This is explained by figures showing that 44% of jobs created in recent years are in sectors like sun-and-beach tourism, meat processing, and certain services. These sectors offer such low wages that, according to the report's authors, workers cost the public purse more than they contribute. These are described as "highly subsidised sectors", with subsidies effectively paid by workers in other areas of the economy.
Catalan productivity, which stood at 92% of the European average in 2000, has fallen to 87%. Since 2010, Catalonia has lost twelve points of GDP per capita relative to Europe. The region was six points above the average and is now six points below. Despite these alarming figures, the report also acknowledges well-performing sectors.
Addressing Economic Decline
The report suggests that public bodies, including the government, provincial councils, and local councils, still possess the tools to reverse this trend. These tools include fiscal, regulatory, and urban planning measures. The economists propose several reasonable actions, which are common practice in other serious European countries.
These recommendations include raising the minimum wage above inflation, normalising VAT for the hospitality sector, eliminating tourist apartment licences outside rural areas, requiring Catalan language proficiency for public-facing jobs, and managing immigration according to the real needs of the desired economic model.
Questions now arise regarding the response from political leaders. What will President Illa say? What will Catalan political parties, provincial councils, and local councils do with this report? What action will the parliament take?
Political Inaction Concerns
There is a concern that little action will be taken. The current political climate appears to favour silence, which can be a form of governance. President Illa, according to observers, tends to let things run their course, hoping to reach the next legislative term without significant disruption. This approach is particularly noticeable given the lack of a strong and forceful opposition.
Esquerra Republicana is expected to approve the budget presented by the Illa government, which could strengthen the president's position. While politicians operate in specific ways, some argue that they often confuse recklessness with prudence, and this situation may be one such instance.
Discussions about the report's nuances are expected. Some may question why it does not focus on fiscal imbalances with Madrid or the failures of the autonomous state system. Others might label the economists as right-wing for advocating a review of the fiscal system to avoid constant penalties on labour income and savings.
Call for Urgent Action
However, the immediate issue is simpler and more urgent. When a group of reputable economists, independent of government, opposition, or known lobbies, dedicate voluntary hours to conclude that the country is in decline, public officials have a minimum obligation. This involves listening, reading the report thoroughly, debating its findings, and making decisions. Failing to do so, according to the report's proponents, is not politics but mere performance.
Society should acknowledge the economists' work and demand respect for their dedication. An alarm call of this nature is never pleasant to deliver and should be valued accordingly. The Fènix report indicates that Catalonia has lived too long on a myth, relying on what it once was economically, culturally, politically, and socially. The authors warn from the outset that "Catalonia's current economic model is unsustainable and will lead the country to economic decline and a breakdown of social cohesion in the medium term." This warning is extremely serious, and society has a collective responsibility to address it.
