1. Spain’s Federal Experience
(A work in progress)
Violeta Ruiz Almendral
Professor of Tax and Finance Law
Universidad Carlos III de Madrid, Spain
Forum of Federations

2. One culture…?

3. Or many…?

4. The Spanish tradition of centralized government
XV century: unification by marriage of the Kingdom of Castilla with the Kingdom of Aragón (which includes Aragón, Catalonia, Balearic Islands and Valencia)
XV and XVI: expansion of Spain (“discovery” (conquest!) of America, etc.)
XVIII: King Felipe V, with the so-called “Decretos de Nueva Planta,” abolishes the political and administrative autonomy of Aragón, Catalonia, Mallorca and Valencia, with the purpose of centralizing and unifying political power (specially painful for Catalonia)
The three provinces of the Basque Country and of Navarra survived this centralizing attempt by the Spanish kingdom (until Franco)

5. The Spanish tradition of centralized government
Short “federalist” experiences:
XIX: First Republic, 1873 Constitution (disaster)
XX: Second Republic, 1931 Constitution ( Spanish civil war)

6. The civil war divided Spain
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7. Leaving many dead (1 million)
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8. And a (fascist) Dictatorship
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9. The Spanish Transition: from Dictatorship to Democracy
1939: Franco wins the civil war, dictatorship starts
1975 (november 20th): death of Franco. Transition starts
1977: first general elections
1978 (december 6th): Constitution is approved
1981 (february 23rd): Coup d’État. Fails. Demostrations all over Spain
1982: Socialist party wins with absolute majority.

10. Transition starts
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11. But Democracy is still feeble: 1981 (february 23rd): Coup d’État
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12. 1981 (february 23rd): Coup d’État; the role of the King
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13. The Spanish Transition: from Dictatorship to Democracy
Dynamics of the process: no major breakthrough, no major change: a “legal revolution”…two elements:
1) FORMAL ELEMENT:
The existing legal framework, the set of laws and orders that had been approved under the Franco regime, were respected and taken as a departure point.
2) MATERIAL ELEMENT:
The will to achieve a maximum degree of consensus among Spain’s diverse political and social forces.

14. The Spanish Transition: from Dictatorship to Democracy
The special relevance of the “constitutional consensus”, achieved in two arenas:
(1) “Moncloa Accords”, government, political parties, trade unions and business associations pledged to guarantee social harmony and economic stability.
(2) Ratification of a Constitution which established a balance among the demands of the diverse groups involved, finding formulas for transaction

15. Eleccions in Spain 1977 First general elections 1978 Constitution
1981 Coup d’Etat (unsuccesful)
1982 Socialist party absolut majority
1996 People’s Party (2001, People’s party absolute majority)
2004 Socialist party
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16. The Spanish Constitution
Bill of rights
Protection of the rights (Constitutional Court)
Social rights
Division of powers
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17. The transformation of the Spanish society
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18. A revolution in many senses
1980: NO WOMEN IN POLITICS
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19. A revolution in many senses
Present government: 50% WOMEN
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20. The Spanish Transition: the role of the European Union
Major institutional catalizer
Financing
Revolution of the legal system
Towards a double federalism?
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21. Why Decentralize Spain?
Decentralization as a means to attaining democracy
Some Communities had seen their autonomous aspirations thwarted by the war (Catalonia, Basque Country, Galisia)
Others agreed that a certain level of autonomy was necessary, to help them protect their differences (Valensia, Canary Islands, Andalusia…)

22. Why Decentralize Spain?
Fear of a unitary State being easier to turn back to being a Dictatorship; dividing power to ensure democracy and a checks a balance system
Want to accomodate different needs, different situations
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23. Why Decentralize Spain?
Differences in tastes for public goods and services arise out of differences in history, culture and language across regions of a country
Differences among regions in their capacities for public administration
Nationalist sentiments
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24. What did citizens think?
Great division of opinions
Explains why Autonomous Communities started off being service providers, without levying taxes
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25. What were the options?
Regional system (Estado integral): large central nucleus and two or three autonomous regions with their own governments, parliaments and legal and jurisdictional powers.
Federal system: same powers for all Communities
Both options were rejected

26. What were the options?
Regional system (Estado integral): too similar to the Second Republic’s (the right would not accept it)
Federal system: would not accomodate different sentiments; maybe not all parts of the territory wanted to become autonomous, maybe not all at the same level
Something new had to be invented…
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27. The formation of the Autonomous Communities
Final solution: asymmetric federalism, federalism á la carte, cheese platter federalism…
Form of the State not defined in the Constitution of 1978
Guarantee of autonomy: “the Constitution is grounded on the indissoluble unity of the Spanish Nation...and guarantees and acknowledges the right to autonomy of its regions” (section 2)

28. The formation of the Autonomous Communities
Being an Autonomous Community is an option
Procedural framework: provinces decide whether they want to became a Community and what authority they want to take on.
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29. What are the “provinces”?
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30. The Statutes of Autonomy
Basic institutional rules of each Community
At the same time: part of the State’s legal system
Statutes must contain:
The name of the Community
Its territorial boundaries
The name, organization and seat of its own institutions
The powers assumed within the framework laid down by the Constitution and the basic rules for the transfer of the corresponding services
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31. The functioning of the Autonomous Communities
No total separation of authority (dual federalism), but rather shared competencies (cooperative federalism)
The Constitution does not assign explicit authority to ACs, they choose over a group of matters listed in the sections 148 and 149
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32. The different levels of authority: fast and slow lanes

33. Closing clauses: residual powers (not automatic)
Section 149.3
“Matters not expressely assigned to the State by this Constitution may fall under the jurisdiction of the Autonomous Communities by virtue of their Statutes of Autonomy”
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34. Closing clauses: paramountcy
Section (cont.)
2) Jurisdiction on matters not claimed by the Statutes of Autonomy shall fall with the State, whose laws shall prevail, in case of conflict, over those of the Autonomous Communities (except for those matters in which exclusive jurisdiction has been conferred upon them)
3) State law shall in any case be supplementary of that of the Autonomous Communities
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35. The formation of the Autonomous Communities
Seven regions would immediately attain the higher degree of autonomy (Catalonia, Galicia, the Basque Country, Andalusia, Valencia, the Canary Islands and Navarre
The other ten chose the lesser degree of autonomy
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36. Common Regime – High Responsibility
Andalucía
Galicia
Castilla-León
Extremadura
Asturias
Navarra
Cantabria
País Vasco
La Rioja
Cataluña
Aragón
Valenciana
Castilla-
La Mancha
Madrid
Murcia
Canarias
Baleares
Legend
Common Regime – High Responsibility
Common Regime – Low Responsibility
Foral Regime Regime

37. The formation of the Autonomous Communities
Different quantitative weight of slow and fast laners

38. Evolution of decentralisation of public expenditures
(% of participation of total public expenditures)

39. An asymmetric system? Intrinsecal asymmetry of the system
This asymmetry is both de facto and de jure and explains the role played by political agreements
Coordination and cooperation are key
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40. The functioning of the Autonomous Communities
The Constitution bestows special functions to the State, to guarantee coordination, unity within autonomy, solidarity…
For example, ‘regulating the basic conditions to ensure the equality of all Spaniards in the exercise of their rights and the fulfilment of their obligations’ or the ‘coordination of the economy’
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41. How can a Community obtain (additional) new authority?
Constitutional reform
Reform of the Statutes of Autonomy (sec. 147)
Delegation or transferral of new authority (sec. 150)

42. Fiscal Federalism in Spain
(also a work in progress)
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43. What the Constitution says…
The right to financial autonomy of Autonomous Communities:
Section 156.1:
“The Autonomous Communities will have financial autonomy for the execution of their authority, following the principles of coordination with the State´s Treasury and solidarity among all Spaniards”
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44. What the Constitution says…
Section 157.1: “The Communities’ resources will be the following...:
- Taxes ceded by the State, surtaxes on State´s taxes and other of the kind.
- Their own taxes.
- Transfers from an Interterritorial Equalization Fund
- Yield from their capital resources
- Public Debt
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45. In practice, asymmetry: two financing systems: The “foral” regimes
Broad taxation powers
Payments to the central State (cupo)
The “common” system
Limited taxation powers
Receive transfers from the central State based on need
Different levels of authority, different needs
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46. The functioning of the Autonomous Communities: the institutional framework
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47. What the Constitution says
The Constitution allows the State to control ACs in some cases (eg Sections 150.3, 153 and 155).

48. What happens in practice…
Instead, the numerous conflicts have been solved – or are in the process of being solved – through politically negotiated agreements, and the Constitutional Court
PROBLEM: excessive role of the Constitutional Court in solving conflicts
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49. The role of political agreements
Advantages:
They promote cooperation
Sometimes the only solution when authority is shared
Disadvantages:
Bargaining attitudes
Different political weight of Communities

50. The role of political agreements
Solutions?
Reform of the framework within which agreements are reached (Senate, permanent conferences)
Clear definition of playing rules

51. The role of the Senate It is not a real territorial Chamber:
Most senators elected by universal suffrage from provincial voting districts. Only 46 out of 253 are appointed by the Parliaments of the Autonomous Communities
Very limited powers making State laws (i.e. no veto rights)
Does not allow multilateral action. (But, would everyone want that?: Basque country/Catalonia’s “bilateral model”)

52. The reform of the system: new Statutes of Autonomy
Basque country: a failed attempt
Valencia
Catalonia
Balearic Islands
Andalucia
Aragón
Castilla La Mancha…

53. A Constitucional reform in Spain?
25th anniversary of the Constitution (2003)
Traditional fear of changing a Constitution in Spain
The misunderstanding of “constitutional patriotism” (=constitutional inmobility)
Fear of opening Pandora’s box

54. A Constitucional reform in Spain?
The dificulties (to name some)
The Socialist party (pro-reform) does not have absolute majority
Great disagreements in the regional question (still!)
No clear idea of where we want to go
Some important problems are not being addressed: lack of coordination/cooperation
Excesive rigidity of Spanish Constitution

55. Separatist Terrorism and the State of autonomies: what now?
Originally a “political” anti-Franco organization
More than 900 dead since the 60s
Mafia like methods to obtain financing; agenda unclear
The 2006 Truce….
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56. …and so much for it
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57. ?
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