Historical Nationalities Advocate Territorial Cohesion and Debate Financing

The debate on the economic articulation of the State brought together at the La Toja Forum the top leaders of the three historical nationalities: the president of the Xunta de Galicia, Alfonso Rueda; the lehendakari of the Basque Government, Imanol Pradales; and the president of the Generalitat of Catalonia, Salvador Illa. Under the moderation of Antón Costas, president of the Spanish Economic and Social Council (CES), the panel on competitiveness and territorial cohesion sought to transcend fiscal discussion to address territorial prosperity as an indispensable pillar of democratic stability.

In the opening of the colloquium, Costas framed the debate by recalling that the future of liberal society and the welfare state is decided in the territory. Citing the analyses of economist David Autor on the triggers of the populist upsurge in the United States and the United Kingdom, he argued that setbacks in productivity and high-quality jobs in regions are the breeding ground for political disaffection. Drawing on the famous words of Franklin D. Roosevelt —”needy men are not free”— and on Mario Draghi’s thesis about the non-negotiable nature of social protection in Europe, the moderator urged to connect industrial development with territorial equity.

“The future of the liberal society and the welfare state is decided in the territory”

The joint image of Galicia, Euskadi and Catalunya projected a clear message of institutional cooperation in the face of polarization dynamics. As the speakers emphasized, the three communities represent indisputable engines of the country: Euskadi and Catalunya account for a quarter of the national GDP, while Galicia and Catalunya together account for a third of Spanish exports.

Stability, Self-government and Industrial Policy as Growth Vectors

In the round on regional diagnoses, Alfonso Rueda claimed political and legal stability as the indispensable premise to sustain economic growth. Galicia has maintained a trajectory of convergence backed by the uninterrupted approval of its autonomous budgets since 2009. For the Galician president, the greatest future opportunities lie in the transition to green energies and in the sustainable exploitation of strategic minerals. He also highlighted the challenges of worker absenteeism, dual vocational training, and the orderly attraction of return migration — which has added around 50,000 people to the community in recent years — as key axes to meet the demand for vacancies in the productive fabric.

Imanol Pradales stressed that political stability in Euskadi has allowed twenty-two consecutive quarters of growth above 2% and placed unemployment at historic lows of 6%. The lehendakari argued that “if we do not generate wealth, we cannot redistribute well-being,” placing the capacity for self-government and the continuity of industrial policies over four decades as the key to Basque success. This strategy has facilitated the transformation of key sectors such as energy and technology, while maintaining high levels of social cohesion as measured by indicators of low inequality.

Salvador Illa detailed the Catalan government’s roadmap to articulate what he defined as a “shared prosperity,” aimed at generating wealth and distributing it socially and territorially. Illa structured his model around five strategic levers: accelerating renewable energies; achieving water self-sufficiency through investments of 2.7 billion euros in regenerated water and desalination; boosting connectivity infrastructures—including the sustainable expansion of El Prat airport, the Mediterranean Corridor and the direct rail interconnection with Euskadi; integrating into international circuits of research and business talent; and administrative simplification combined with the professionalization of public administration.

Housing as the Gordian Knot of Social Cohesion

Access to housing emerged as the main point of convergence and concern for the panel, recognized as a direct obstacle to increasing families’ disposable income, to labor mobility, and to retaining young talent. The three leaders agreed that housing responses require the intensive mobilization of public land, adequate financing, and the involvement of the private sector.

“The three leaders agreed that the housing response requires the intensive mobilization of public land, adequate financing, and the involvement of the private sector”

Illa expressed deep disappointment at parliamentary blockages to residential initiatives, arguing that when the market fails to guarantee an essential good, public administrations have an obligation to intervene. Among the measures advanced in Catalonia, he highlighted the prioritization of land for residential use through the reconversion of tourist flats and the application of mechanisms such as the “shared purchase” contemplated in the Catalan Civil Code.

From the Basque experience, Pradales noted that Euskadi has the largest relative stock of publicly protected housing in the state (close to 8%, with a target of reaching 12% by 2032). He also announced the launch of a social housing fund for public-private collaboration endowed with public land for 75 years to promote 10,000 affordable rental homes aimed at middle classes.

Contrasting with market interventions, Rueda argued for focusing efforts on the direct construction of public housing (4,000 homes already in progress in Galicia) and on land leasing that fosters a secure legal environment for small property owners, warning that restrictive or fiscal regulations risk reducing the available rental supply.

The Substantive Debate: Madrid Centralization and the Financial Model

The final stretch of the colloquium made visible the disagreements around the architecture of the State. Pradales voiced concern about the trend toward centralization of political, economic and technological power around Madrid, noting that nearly half of foreign investment arriving in Spain concentrates in the capital. The lehendakari argued that this centralizing model is detrimental to territorial cohesion and urged drawing inspiration from polycentric schemes such as those in Germany or Italy.

“The lehendakari argued that this centralizing model is detrimental to territorial cohesion and urged inspiration from polycentric schemes like those of Germany or Italy”

In the debate on regional financing, Illa defended the proposal for a new model for Catalonia, arguing that the current system is outdated. According to the Catalan leader, the reform would entail the transfer of 21,000 million euros from the General State Administration to the common-regime communities to sustain health and education services and to reduce financing gaps per adjusted inhabitant without generating privileges or harming any territory.

Facing this bilateral approach, Rueda rejected ad hoc allocations and called for a multilateral agreement in which all autonomous communities participate. The Galician president warned that the proposed distribution criteria place Galicia among the worst-funded regions in the allocation of new resources, and he insisted that any reform must guarantee equality in the provision of public services regardless of where one resides.

The meeting concluded with the recognition that, beyond legitimate partisan nuances and regional models, ongoing dialogue among the autonomous governments is the best guarantee to combine economic competitiveness with the country’s social cohesion.