A fiscal path to sovereignty? The Basque Economic Agreement and nationalist politics

Abstract

Bilateral Spanish-Basque relations over the Basque model of near fiscal autonomy (Concierto Económico or Economic Agreement) have been characterized by more tension than harmony since the 1980s. The main source of discord lies in different conceptions of the model: while the Basque nationalists seek increasing fiscal autonomy verging on sovereignty within Europe, Spanish governments see it as a form of fiscal decentralization within Spain remaining subordinate to Spanish legislation. These different conceptions cannot easily co-exist in a loose relationship of mutual tolerance because the development of the model continues to bring them into conflict, feeding into the broader political clash over how best to accommodate the Basque region within or with Spain.