The debate on the economic articulation of the State brought together at the La Toja Forum the top representatives of the three historical nationalities: the president of the Xunta of 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 the president of Spain’s Economic and Social Council (CES), Antón Costas, the panel on competitiveness and territorial cohesion sought to transcend financial talk to address territorial prosperity as an indispensable pillar of democratic stability.
At the opening of the colloquy, Costas framed the debate by recalling that the future of liberal society and the welfare state is decided in the territory. Citing economist David Autor’s analyses on the triggers of populist upswings in the United States and the United Kingdom, he argued that setbacks in productivity and high-quality jobs in the regions are the breeding ground for political disenchantment. Drawing on Franklin D. Roosevelt’s famous words —”the needy men are not free men”— 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 liberal society and the welfare state is decided in the territory”
The shared image of Galicia, Euskadi, and Catalunya projected an explicit message of institutional cooperation in the face of polarization. As the speakers noted, the three communities are undisputed engines of the country as a whole: Euskadi and Catalunya account for a quarter of the national gross domestic product, while Galicia and Catalunya together make up a third of Spain’s exports.
Alfonso Rueda, Salvador Illa e Imanol Pradales, during the La Toja Forum. Photo: Agenda Pública / Yanka Soto
Stability, self-government and industrial policy as growth drivers
In the regional-diagnosis segment, Alfonso Rueda asserted political and legal stability as the indispensable premise for sustaining economic growth. Galicia has maintained a convergent trajectory backed by the uninterrupted approval of its regional budgets since 2009. For the Galician president, the greatest future opportunities lie in the transition to green energies and the sustainable use of strategic minerals. He also highlighted tackling absenteeism, dual professional training, and the orderly attraction of returning immigrants — which has brought nearly 50,000 people to the community in recent years — as key axes to meet the demand for vacancies in the productive fabric.
Imanol Pradales, for his part, emphasized that political stability in Euskadi has enabled twenty-two consecutive quarters of growth above 2% and pushed unemployment to historic lows of 6%. The lehendakari argued that “if we do not generate wealth, we cannot redistribute welfare,” placing the capacity for self-government and the four-decade continuity of industrial policies 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 low-inequality indicators.
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; water autonomy through investments of 2.7 billion euros in regenerated water and desalination; boosting connectivity infrastructure — including the sustainable expansion of El Prat airport, the Mediterranean Corridor, and the direct rail link with Euskadi; integration into international circuits of research and entrepreneurial talent; and administrative simplification combined with professionalization of public administration.
Salvador Illa outlines the Catalan Government’s road map to spur a “shared prosperity”. Photo: Agenda Pública / Yanka Soto
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 rising households’ disposable income, labor mobility, and retention of young talent. The three leaders agreed that housing policy demands intensive mobilization of public land, adequate financing, and engagement from the private sector.
“The three leaders agreed that housing policy requires intensive mobilization of public land, adequate financing, and involvement from the private sector”
Illa expressed deep disappointment at parliamentary blockades 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 priority allocation of land for residential use through the repurposing of tourist flats and the application of mechanisms such as the “shared purchase” contemplated in the Catalan Civil Code.
From the Basque experience, Pradales explained that Euskadi has the largest share of protected public housing in the state (close to 8%, with a goal of reaching 12% by 2032). He also announced the launch of a public-private joint housing fund endowed with public land for 75 years to promote 10,000 affordable rental homes aimed at the middle classes.
In contrast to market interventions, Rueda argued for focusing efforts on the direct construction of public housing (4,000 units underway in Galicia) and on land allocation to promote a secure environment for small property owners, warning that restrictive or punitive regulations risk reducing the supply of available rental housing.
Imanol Pradales defends a more polycentric territorial model and criticizes the concentration of resources in Madrid. Photo: Agenda Pública / Yanka Soto
The deeper debate: Madrid-centered centralization and the financial model
The final stretch of the colloquy brought to light the disagreements surrounding the architecture of the State. Pradales expressed concern about the trend toward centralization of political, economic, and technological power around Madrid, noting that almost half of foreign investment arriving in Spain is concentrated in the capital. The lehendakari argued that this centralizing model is detrimental to territorial cohesion and advocated drawing inspiration from polycentric patterns such as those in Germany or Italy.
“The lehendakari argued that this centralizing model is detrimental to territorial cohesion and urged drawing inspiration from polycentric schemes like those of Germany or Italy”
In the debate on regional financing, Illa defended the proposal for a new Catalan model, arguing that the current system is outdated. According to the Catalan leader, the reform entails the transfer of 21,000 million euros from the General State Administration to the common-regime communities to sustain health and education services and reduce financing gaps per adjusted inhabitant without creating privileges or harming any territory.
The President of the Xunta explained that restrictive or punitive regulations risk lowering the rental supply. Photo: Agenda Pública / Yanka Soto
Facing this bilateral approach, Rueda rejected bespoke allocations and called for a multilateral agreement in which all autonomous communities take part. The Galician president warned that the proposed distribution criteria place Galicia among the worst-funded regions in the allocation of new resources, and insisted that any reform must guarantee equal provision of public services regardless of place of residence.
The encounter concluded with the recognition that, beyond legitimate partisan distinctions and regional models, ongoing dialogue between the autonomous governments is the best guarantee to combine economic competitiveness with the country’s social cohesion.
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