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D+1 the negotiations on assets and liabilities

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Information about D+1 the negotiations on assets and liabilities
News & Politics

Published on March 8, 2014

Author: albert.macia

Source: slideshare.net

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The process to an independent State and the first months of a Catalan State. The negotiations on assets and liabilities. July de 2012

Once the Catalan State is proclaimed, it is necessary to obtain the international recognition from key countries Generate social support Political Sphere Sovereignty Act Communicate the process internationally, establish alliances with key countries and agree with them terms for recognition Declaration of Independence First months as an independent State International recognition of the Catalan State Define key transition processes Operational Sphere (State's structure) Define necessary functions Appoint, supervise and coordinate key persons and work teams Develop information systems 2

Simultaneously, it will be necessary to start negotiations regarding the Spanish State succession }  Method: §  International Conference of plenipotentiaries §  Mediation and good practices model §  Mediation process and final agreements subject to International Law }  Participants: §  All the successors of the Spanish State §  Besides, the participation of an impartial mediator will be necessary. It can be a person, a State, a group of states or an international organization 3

Simultaneously, it will be necessary to start negotiations regarding the Spanish State succession }  Content, among others: §  Previous agreement on the place were negotiations will be held, the method, the mediators and international observers... §  Sovereignty succession and continuity of Spain’s international subjectivity §  Dissolution of the Spanish Crown §  Distribution of assets and liabilities, after the debt entries have been territorialized §  Reciprocity on the legal status of the Spanish language in Catalonia and the Catalan language in Spain §  Joint management of shared assets, as international water flows §  Land and maritime borders definition §  Spanish nationality transfer §  Reciprocal recognition and establishment of diplomatic relationships §  Private corporations nationality (head/fiscal office...) 4

Negotiations regarding the succession of the Spanish State should be based on a set of assumptions }  The conference of plenipotentiaries will work behind closed doors. Catalonia reserves the right to avoid the direct contact between the Catalan delegation and the other Spanish delegations. }  The distribution of the State’s assets and liabilities must fulfill the principles of assets/liabilities equity, and the principle of proportionality on demographic or economic terms. }  It must be taken into account the purpose and territoriality of expenditure items and the historical contribution of Catalonia and the Catalan fiscal deficit full refund. }  The Catalan State is not obliged to assume the part of the Spanish debt that in principle corresponds to it or to feel obliged in any other matter while there’s no agreement on the rest of subjects, especially on the distribution of State’s files and assets, and the full restitution of the historical contribution of Catalonia and its fiscal deficit. 5

Negotiations regarding the succession of the Spanish State should be based on a set of assumptions }  Negotiations and agreements will be ruled by International Law. The latter will be considered international treaties. Coercion or threats upon Catalonia or its representatives would entail the absolute nullity of the treaties (art. 51 Viena Conv., 1969). }  The matters on which diplomatic representatives do not reach an agreement shall be negotiated directly between the heads of state and government of the countries involved. }  The matters on which there is no final agreement, should be subject to resolution through legal proceedings of peaceful settlement of disputes. }  The decision of the International Court of Justice should be binding on the parties. 6

Distribution of State’s assets }  The distribution of State’s assets should be done according the restitution of historical contribution principles, the territoriality principles and the assumption of the debt related to the distributed assets. }  The agreement on the assets distribution would condition the agreement on the distribution of the State’s debts. While there’s no firm agreement, the Catalan State would not assume Spanish debt. Predecessor state assets }  Historical contribution principles (fiscal scales deficit): §  §  }  Profiteering principles: §  §  §  §  }  Whole restitution + damages caused and lucrum cessans (period and interests to be determined) Whole restitution of the Social Security Reservation Fund (proportionally to Catalan contribution) Enrichment of certain Autonomous Communities with Catalonia’s relative impoverishment (CAT) (family income, IDH...) Whole restitution (min. 15 years, extendable) More damage caused and lucrum cessans. If Dolo practice is demonstrated: interests (restore the money multiplying effect) If there’s no agreement, it would create international controversy... Appeal to International Court of Justice (no hurry, risk premium rise) Privatized public assets (1986-2012) §  15-20% participation and representation on the administration boards of Spanish privatized big corporations, by: a) capital increase assumed by the predecessor State, b) capital increase assumed by their own shareholders, b) Catalonia’s assets nationalization to privatize them (credible threat) (Red Eléctrica / Electric Network...) 7

Distribution of State’s assets Predecessor state assets Ø  Other assets: Spanish State’s shares and bonds of public and private corporations Spanish State’s public debt bonds and all kinds of financial assets Bank of Spain reserves (Treasury) (gold, foreign currencies, national currencies...) Debts and pledged made to the Generalitat (competitiveness fund, third additional disposal...) Non assumed financing commitments (infrastructures on budget but never executed) Files, art works and collections related to Catalonia (by author, topic...) (Dalí...) 15-20% of the National Patrimony that cannot be territorialized (Prado and Reina Sofia museums...) Restitution of spending and investments made in Madrid and parcial territoriality in Catalonia (Airports, M-30...) §  Contribution to international organizations (IMF, UN, EU...) (...) §  §  §  §  §  §  §  §  }  Conclusions: §  Neither the Spanish State nor its continuators will be able to face the distribution of State’s assets and liabilities §  Spain’s risk premium will rise while we do not reach an agreement (we want it all and we’re in no hurry) §  Payment facilities: part in cash, part paid in kind (military material, national patrimony, corporations shares...), territory (Franja de Ponent) (...). The remaining 2-4% of Spanish GDP in 30-50 years. §  Spain’s economic growth will be conditioned by the agreement. 8

Distribution of State’s debts }  }  The distribution of State’s liabilities should be done according the territoriality principles and the assumption of the debt related to the distributed assets. It should include Generalitat’s debt and that of the local entities, induced by a requisition tax policy, and an income policy that discriminates on national identity reasons. Predecessor state debts }  The following are excluded of State’s debt distribution: §  Private entities debt (domestic economies, private corporations, financial entities) §  Territorial public entities debt §  Debt entries corresponding to territories outside Catalonia (AVE Madrid-Mérida...) (T-4...) (M-30 cover...) §  Debt entries for service provisions outside Catalonia §  Debt entries corresponding to items or services not assumed by Catalonia on the State’s assets distribution. (Defense Ministry debt: distribution of assets that generated that debt) }  Debt that should be assumed by the Catalan State: §  It would only affect those debts contracted by the State with other International Law subjects (33 C. Viena 1983) (it excludes State’s debt with private subjects – these are not Public International Law objects) §  State’s debt corresponding to Catalonia’s territory §  16-19% of non territorial State’s debt (according to demographic – economic criteria to be negotiated) (20%) §  Evaluate the impact of the difference between Spanish risk premium and Catalan risk premium 9

Empresaris  per  l’Estat  propi   Only  by  being  an  independent  state   will  Catalonia  be  economically  viable   www.ccncat.cat   info@ccncat.cat    

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