Spain is a large and diverse country. One of its key differences lies in income levels across its autonomous communities (CCAA): Madrid, the Basque Country, Navarre, Catalonia, Aragon, the Balearic Islands and La Rioja are above average, while the rest fall below. The gap between the richest and the poorest region is considerable—61 points on a national average set at 100. Yet all citizens are entitled to equal access to essential public services such as healthcare, education, and social services. This goal would be impossible for the lower-income regions without additional financial support from a shared central administration: the State. It is this State funding that also makes it possible to pay pensions in regions running deficits (where spending exceeds revenue from social contributions)—which is the case in almost all communities.

To fulfill this redistributive role—to ensure the sufficiency and fairness of these services—the State draws from a portion of tax revenues collected across Spain, with the exception of the Basque Country and Navarre. This anomaly—which should be corrected—is now set to be expanded through a special financing model for Catalonia, the fourth richest region in Spain (index 114 out of 100), and one with a significant economic footprint, representing 18% of the country’s total income.

Today, Monday, the first stage of this new process has been made official: the transfer to Catalonia of personal income tax (IRPF) and VAT from small and medium-sized enterprises. While presented as a further step in self-government, in practice this means that Catalonia will now collect around €20 billion more in revenue that previously went into the State’s coffers. The signatories have framed this as the beginning of a broader transfer of remaining taxes still under the common regime (the rest of VAT, excise duties, and corporate tax), which could ultimately mean over €35 billion a year in additional revenue for Catalonia—and an equivalent loss for the State.

The negotiators’ duplicity in concealing the core of this operation may involve a symbolic return of part of that amount from Catalonia to the State, under the guise of covering services the State provides in the region and a “solidarity contribution” to the rest of Spain. Let’s suppose, for argument’s sake, that this transaction initially preserves Catalonia’s current net contribution to the State. Even so, it’s hard to understand why such a radical change in the model is needed just to maintain the status quo. This is where the experience with the Basque Country and Navarre becomes relevant: it shows a steady erosion of that contribution until it becomes merely symbolic (which explains why those regions have funding per capita indexes of 220 and 180, respectively, on a national average of 100), all while the rest of Spain covers their significant pension deficits—over €5 billion and €800 million, respectively. A sweet deal in every sense, despite the unjustified victimhood narrative of Basque parties.

A similar evolution for Catalonia under a special model is entirely plausible, especially given how crucial Catalan parties’ votes—including the PSC’s—are for forming a central government (as is currently evident). As the saying goes, politics makes for strange bedfellows. In short, the most likely outcome is that the State will lose more than €35 billion in revenue and, on top of that, continue to cover Catalonia’s pension deficit (which exceeds €5 billion annually). This raises an immediate question: under these new conditions, how will the State fulfill its redistributive function toward the lower-income regions?

The Spanish government’s offer to extend a similar model to the rest of the autonomous communities is more than misleading—poorer regions would lose money. And if Madrid were to adopt the same system, the State would effectively cease to exist. What we are facing is a radical shift from a decentralized state model to an asymmetric confederation, where three of the four richest territories keep their (above-average) resources, have their pension deficits covered, and leave the rest of the country to fend for itself with lower-quality public services. This would be a true assault on equity in Spain, because the ability to redistribute income to poorer areas would be severely undermined (to put it mildly).

The process of establishing a special financing regime for Catalonia is now underway. It is a key part of what the President of the Generalitat, Mr. Illa, promotes as: “We work to resolve secessionism in Catalonia, while others work to encourage it.” Judging by the statements of the parties currently in government, they share this false dichotomy: either you accept the special regime or you fuel independence. All of them are complicit in this scheme, ignoring its permissive impact on national solidarity. Some analysts say this is being done to secure power; a sadder possibility is that they actually believe this unjust, asymmetric model offers a solution to Spain’s territorial tensions. I must admit, I wouldn’t be surprised if that were the case. One wonders what these self-declared left-wing parties will tell their voters when, at the end of this process, they’re forced to cut spending in their own regions because they can no longer sustain the current level of benefits guaranteed under basic laws of coexistence (including the Spanish Constitution).

The current system of regional financing has its flaws: it’s illogical that communities with lower contributions per capita (such as Cantabria, La Rioja, Extremadura, the Canary Islands, Castilla y León, Asturias, and Galicia) receive more public funding per capita than those that contribute more. But the solution is to bring everyone into line with the average (where Catalonia and Madrid are), not to extend to Catalonia the vast privilege already enjoyed by the Basque Country and Navarre. Instead of pursuing this goal, what’s being proposed is an outrageous abuse. The course chosen by the Spanish government (and its followers) is the worst possible for most Spaniards—whether it succeeds or not—because even the attempt will sow the seeds of a new “procés.”

There is deep fatigue over endless conflicts based on a refusal to acknowledge a shared national space simply because some regions are wealthier. Given the current proposal, from a financial and fairness perspective, independence would be a clearer, more honest option—provided it comes with two conditions: first, that those who wish to exercise it pay their proportional share of Spain’s public debt (18% of €1.6 trillion in the case of Catalonia), and second, that they take full responsibility for the pension system. With these premises, a referendum across Spain could be held with a very high chance of success. It’s sad to contemplate such an outcome—especially for those who oppose independence within those regions—but it would bring clarity and remove one of the main excuses for avoiding the structural reforms Spain needs to grow in a way that ensures a fairer distribution of income.