Spain’s new government lifts budget controls on Catalonia

MADRID  – Spain’s new Socialist government said on Friday it had lifted financial controls on Catalonia and would seek dialogue with the region’s administration to relieve tensions over an independence bid which pitched the country into political crisis.

Catalonia’s secessionist drive is one of the thorniest issues facing Prime Minister Pedro Sanchez after he toppled centre-right premier Mariano Rajoy last week in a vote of no- confidence.

The financial controls, imposed by Rajoy ahead of last October’s independence referendum, meant that payments made by the Catalan government had to be scrutinised by the budget ministry in Madrid, which could exercise a veto.

“We want to restore normality, so with the constitution in one hand and dialogue in the other, we will try to make progress,” Isabel Celaa, the newly installed government spokeswoman, said after the new cabinet’s first meeting.

Sanchez will probably meet Catalan regional chief Quim Torra before the summer, she added, without elaborating.

The apparent olive branch to the regional government marks a change in tone from Rajoy’s hard line against the secessionists, which culminated in the imposition of direct rule, but it is not clear what Sanchez can offer Torra.

Heavily-indebted Catalonia will still have to provide information to the budget ministry to keep access to state funds it has relied on since being shut out of debt capital markets during an economic crisis that began to bite 10 years ago.

Torra has pledged to continue the independence campaign for which Spanish judges want to try his predecessor, Carles Puigdemont, who is currently awaiting the outcome of an extradition request in Germany.

Spain’s constitution states that the country is indivisible and Rajoy had argued that the October referendum was illegal.

The Socialists backed Rajoy’s imposition of direct rule on Catalonia and the nomination of a staunchly unionist Catalan politician as Spanish foreign minister has been seen as suggesting they do not plan to cut deals.

While drumming up support for the no-confidence motion that felled Rajoy, Sanchez had promised talks on the issue but remains opposed to Catalan independence.

Another referendum remains “absolutely out of the question”, Celaa said on Friday.