Holding early elections in Catalonia adds one more headache for the Cristóbal Montoro and the Ministry of Finance. They are scared of the repercussions that the unplanned elections will have on the region?s budget and deficit objective.
Catalonia's 2010 elections cost 26 million euros, and parties invested around 10 million in their campaigns. High spending like this would not go over well right now for the region. The big issue is that the election impasse will disrupt Catalonia?s cutback measures and its ability to carry out reforms that were supposed to go into effect in 2013. Plus, Catalonia has asked Spain for over 5 billion in aid. The electoral campaign is going to diffuse budget agreements (around 800 million in cutbacks) that the Catalonian government has to take on between now and the end of the year without its deficit exceeding 1.5% of GDP. Similar to what happened with other regional governments and public administrations, one region not meeting its objective makes it hard for others to do so. If this happens, Montoro would have to intervene, taking over Catalonia accounts. To intervene in the middle of Catalonia's elections would put its leaders on the spot, signaling an advantage for the CiU party and increasing sovereign sentiment. There is no coincidence. With this election, Arturo Mas is trying to take responsibility for the failure of Rajoy's government and take advantage of nationalist sentiment in order to divert attention away from the cutbacks that it needs to apply.
