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Eugenio Simon Acosta, Full Professor de Financial and Tax Law

The mutilated economic agreement

Thu, 03 Jul 2014 14:19:00 +0000 Published in Navarra Newspaper

With all due respect, the Constitutional Court does not know what the agreement Económico is. The thing would not be of great importance if it were not for the fact that its interpretation is legally binding. The obligatory compliance that we all owe to the TC ruling of 26/6/2014 entails, plain and simple, the crumbling and subversion of what has always been the agreement Económico. But compliance does not prevent that, from a scientific point of view, we can affirm that the TC is seriously mistaken and its mistake destroys the pillars or foundations on which the agreement has rested from 1841 to the present times.

Expressed in journalistic and metaphorical terms, so that the people of Navarre understand the scope of the sentence, Mr. Germán Gamazo has given checkmate 120 years after losing the queen in the first moves of the game. This Minister wanted the taxes of the State to govern in Navarre and so it has been agreed last week by the Constitutional Court. The monument to the fueros of Paseo de Sarasate has lost its meaning and has become the memory of an episode buried in the basements of history.

This is nothing more than the chronicle of a death foretold. More than once I have denounced (also in the pages of this newspaper) that it was a capital mistake to introduce in the agreement the expression "agreed taxes" because, unlike the Deputations of the Basque Country, which always agreed their taxes one by one, Navarre never agreed or agreed taxes, but had the power to establish any new tax and was immune to the taxes created by the State, which were not applied in Navarre. The TC ruling of 14/11/2012 used the grammatical meaning of the expression "agreed taxes" and said that the non-agreed (not agreed) state taxes govern in Navarre and belong to the State until said otherwise in a modification of the agreement. From this moment on, the agreement was left hanging by a thread and, as expected, the thread has broken.

The Constitutional Court's argument is based on the fact that the Constitution does not guarantee Navarre specific competences, but only preserves the "image of forality", which the Constitutional Court itself defines as the set of features that make the institution (the agreement) identifiable over time. This premise being true, the Constitutional Court is wrong when it says that the image of forality consists simply in the fact that the taxes introduced by Navarre must be previously agreed upon. What the Constitutional Court actually does is to create or invent an image of forality that does not correspond at all to tradition, but rather inverts it and transforms it into the opposite of what it has always been. The agreement has uninterruptedly meant that State taxes do not apply in Navarre until they are agreed upon, and the Constitutional Court is now saying just the opposite.

The TC has allowed itself to be carried away by an error that can be found at agenda outside Navarre: confusing the agreement with the Agreement. It is common to hear people talking about the Agreement of Navarre and the Basque Country and those who express themselves in this way show a deep ignorance of the roots and the nature of the agreement. The sentence of the TC, following the same line, has only dynamited the essence of the agreement, lowering it to the level of the Conserto.

The sentence not only violates the foundations of the agreement, but also the own doctrine of the TC, which has declared that "the concept of historical right employee by the first additional provision of the Constitution and the LORAFNA appeals, among other things, to a certain content of competence that would be exercised continuously by the Foral Institution and recognized by the State". And, what is more reprehensible, it has infringed art. 39.1.a) of the LORAFNA, which is part of the block of constitutionality and establishes that Navarre has "all those Schools and competences that it currently exercises, under the protection of the provisions of the Ley Paccionada of August 16, 1841 and complementary provisions". The TC does not even quotation this precept and, as it is easy to imagine, does not even ask itself or investigate what competences Navarre exercised in subject taxation when the LORAFNA was enacted.