The relationship between the PSC and ERC, a fragile but stable house of cards

Yesterday marked the first anniversary of the endorsement by Esquerra members of the agreement to appoint Salvador Illa as president of the Generalitat in exchange for special funding for Catalonia. In a context of internal division—Junqueras had resigned two months earlier—members supported the agreement with 53.5% of the vote. The storm within the Republicans was only mitigated by a consensus in the days leading up to the referendum. In the assemblies, the majority believed the agreement was positive. The problem lay in the distrust of the PSC and skepticism that it could be implemented.

This coldness was reflected in the pact document. The two parties emphasized the "distance" between the independence movement and left-wing federalism, arguing that they were still "far from reaching an understanding to chart a shared long-term path." However, the "drive from the grassroots of Catalan political movement" opened a new era.

365 days later, the PSC believes there is a "bond of trust" with the Republicans. It is the group with which it most agreed in the Parliamentary votes: 72%. For its part, the ERC admits a certain degree of harmony with the Government and that progress is being made on several elements of the investiture pact—they put this in writing in the agreements for the three credit supplements.

There are four pillars in the 28-page text signed by both parties: the resolution of the political conflict, the financing model, the recognition of Catalonia as a nation and the strengthening of the language, and sectoral policies to ensure the continuity of the Aragonese Government's roadmap.

The crux of the matter is the specific financing. This issue is, from the ERC's point of view, quite entrenched, and they hold the government responsible. The impact doesn't just affect the Spanish legislature: it could affect the Catalan budget. Without a new financing model or tax collection, there will be no accounts. This is the line that ERC has set.

The outcome of the latest bilateral meeting clouds the relationship between the Republicans and the Treasury.

Why does financing affect the alliance with the PSOE? It's worth remembering that the Socialist federal executive met urgently to endorse the investiture agreement and, consequently, the special financing. The outcome of the bilateral meeting between the State and the Generalitat (Catalan Government) on July 14 has clouded the dynamics between Esquerra and the Treasury, and last Sunday, Junqueras, in La Vanguardia, raised his tone and described it as "frankly disappointing."

Without Socialist support, there will be no new model. On the Thursday before the bilateral meeting, everything seemed on track. The possibility of jointly registering in Congress the bill that the ERC ultimately plans to present, whether or not there is an agreement on the regulatory changes that would allow the Catalan treasury to collect taxes, was underway. The inclusion of the principle of ordinality in the preamble and not in the agreements derailed everything and led to Republican discontent.

It is no small matter that the positions of the Catalan Government and ERC are aligned in this debate. So much so that compliance on this issue has generated difficulties between the Catalan government and the government. The president was clear this week that the ordinal order must be respected. So did spokesperson Sílvia Paneque. Aware that ERC is demanding more action, the Ministry of Economy will approve a decree deploying the ATC after the summer break.

Almost everything, then, depends on financing. The Republicans acknowledge the complexity of forging a majority and that resizing the Catalan treasury takes time. The master plan that delays personal income tax collection until 2028 has not changed the relationship with the Catalan government. ERC views it as a "waste of paper" because, without changes to three laws, there will be no tax management. The Executive Branch also supports these modifications. The resistance is in Madrid, and the Republicans are appealing to the PSC (Spanish Socialist Workers' Party) to put pressure on the PSOE (Spanish Socialist Workers' Party).

Aside from this issue, ERC highlights the transfer of Rodalies (the joint venture's bylaws were approved this week), the strengthening of branches abroad, and the National Language Pact. Other agreements have been reached, such as the process for the Catalan Institute of Finance to obtain a banking license, finalized this week.

The Socialists see a "bond of trust" with the Republicans: they agreed on 72% of the votes.

On the other hand, there are disagreements over the expansion of El Prat and other commitments that ERC would like to accelerate, such as the office to promote Catalan national sports teams—which will be launched this year. Nor has the convention to resolve the political conflict been created due to the reluctance of several groups to join it.

If there were no budget, ERC wouldn't consider calling for elections. So, an alliance not without its setbacks, but never on the brink of collapse.

The change in negotiations

Oriol Junqueras's return to the presidency of ERC last December involved a change of interlocutors and negotiators with the PSC. He himself has become involved in financing and speaks with both Illa and Sánchez. The new leadership assumed the continuity of the pact with the Socialists, despite the fact that it was never known whether the Republican leader supported the agreement in the referendum or not. What Junqueras has argued is that at this stage, it is possible to go beyond what was written in the August 2024 document. In a way, the roles within ERC have been reversed: while the majority of one of the alternative candidates to Junqueras, Nova Esquerra Nacional, made a strong commitment and defended the pact in the face of the vagueness of Militància Decidim, this faction now expresses disenchantment with the pact's fulfillment and demands that the leadership toughen its rhetoric. The Foc Nou faction is calling for a referendum on support for the PSC. But what has changed under Junqueras's leadership is a certain overcoming of the complex regarding Junts—and its criticisms—that in recent years had marked the path of the Republicans.