Grassroots Approval: Catalonia's ERC Backs Historic Deal with Spain's Socialists

The grassroots members of Catalonia's separatist ERC party have voted to support a regional government deal with Spain's ruling Socialists. This agreement could repair Madrid's uneasy relations with Catalonia and impact Spain's fiscal system. Socialist Salvador Illa is set to be the new head of the Catalan regional government.

Grassroots members of Catalonia's separatist ERC party have given their backing to a regional government deal with Spain's ruling Socialists. This move, supported by a narrow majority of ERC members, could not only repair Madrid's strained relations with the region but also influence Spain's entire fiscal system. According to party sources, the agreement will see Socialist Salvador Illa named as the new head of the regional government.

Catalonia, one of Spain's wealthiest regions, has been governed by separatists since 2010, peaking in 2017 with a controversial independence referendum. The nationalist movement has since lost traction, unable to secure enough support to form a government in May's regional elections. The only way to avoid a repeat election now lies in an agreement between the winning Socialists and the left-wing ERC.

Under the preliminary deal, Catalonia will gain autonomy in collecting and managing taxes, potentially clashing with Spain's national fiscal system. This move would require approval from Spain's highly-fragmented parliament. Critics and even some regional Socialist leaders have raised concerns about the proposal's ambiguity, particularly its implications for fiscal fairness among Spain's regions. Prime Minister Pedro Sanchez has called the deal "a step towards federalisation" and "good news" for Spain.

(With inputs from agencies.)