By: Enrique Opi Tufet, Regional Manager of InFluCat and Senior Adviser on Tourism.
The agreement between ERC and the PSC to approve a new budget in Catalonia is much more than a simple parliamentary deal. It is a political victory with several meanings, both in Catalonia and in Spain as a whole. For Salvador Illa, it is a major triumph that strengthens his position as the leader of a new political stage in Catalonia. For Pedro Sánchez, it is also an important success because it allows him to present dialogue and negotiation as a real and effective way of governing.
Political boost for Pedro Sánchez
More broadly at the national level, the Catalan budget agreement is a significant political boost for Pedro Sánchez because it reinforces the central argument of his entire governing strategy: that dialogue, compromise and pragmatic negotiation can still produce results in an increasingly fragmented Spain. Sánchez has spent years defending agreements with regional and nationalist parties against fierce criticism from the opposition, particularly the PP and Vox, who portray these deals as signs of weakness or excessive concessions. The fact that the PSC, ERC and Comuns have managed to reach such a wide-ranging agreement now gives Sánchez a concrete example of political stability emerging from negotiation rather than confrontation. It also strengthens the PSOE narrative that the territorial conflict in Catalonia is slowly being normalized through institutional cooperation instead of unilateralism or constitutional crisis. At a moment when Sánchez continues to govern with fragile parliamentary majorities in Madrid, any successful pact involving Catalan parties becomes politically valuable because it demonstrates that alliances across ideological and territorial lines remain possible.
New tensions with Junts Per Catalunya
At the same time, the agreement is likely to generate new tensions with Junts and could indirectly strengthen the rhetoric of Aliança Catalana. For Junts, the pact risks confirming a political shift in Catalonia in which ERC increasingly accepts a pragmatic relationship with the Socialists, leaving Junts more isolated as the main force defending a harder line on sovereignty. This may push Carles Puigdemont and Junts to harden their discourse against both the PSC and Sánchez in order to avoid losing nationalist voters to Aliança Catalana, which has been growing precisely by accusing the traditional independence parties of weakness and compromise. Junts will probably try to present the agreement as proof that ERC has abandoned the independence movement in exchange for administrative concessions, while Aliança Catalana is likely to go even further by portraying both ERC and Junts as part of an exhausted political establishment. In Madrid, this dynamic could make Sánchez’s already delicate relationship with Junts even more unstable, because Puigdemont may feel increasing pressure to distance himself from Sánchez and adopt a more confrontational strategy in order to preserve his political space within the pro-independence camp.
The agreement arrives after months of uncertainty and political tension. The last Catalan Government budget to be approved was in 2023. Catalonia has needed stability, especially after years marked by institutional conflict, division and repeated elections. With this pact, Illa shows that the PSC is capable not only of being elected but also of building majorities and reaching agreements with other progressive forces. This is particularly significant because the PSC has managed to convince ERC, a party that for years defined itself in strong opposition to the Socialists.
What makes the agreement even more remarkable is that it crosses several political red lines that until now had blocked negotiations between both parties. One of the most important was the strengthening of the Catalan tax authority, a long-standing demand from ERC linked to greater fiscal autonomy for Catalonia. The new agreement allocates more than 500 million euros toward expanding and consolidating this institution. In addition, the pact includes a major investment of around 5 billion euros for a new peripheral rail line designed to improve transport connections across Catalonia. Another key concession concerns the governance of the Zona Franca, the strategic economic and industrial area located next to the port and airport of Barcelona. The majority of powers and control in this economically vital zone will now pass into the hands of Catalan administrations, something that ERC has pursued for many years and that previous governments had resisted accepting.
Another way of doing politics
Most importantly, Sánchez can now point to an example of agreements with opposition parties outside the national Parliament. Spanish politics has become deeply polarized in recent years, especially in Madrid. The atmosphere in Congress is often dominated by confrontation and mutual vetoes. In contrast, the Catalan agreement shows another way of doing politics: negotiation instead of permanent conflict.
The PSC is trying to present itself as the central force capable of uniting different sectors of the left. ERC represents one tradition of Catalan progressivism, while the Comuns represent another. Even though the Comuns have not formally joined the agreement, few doubt that they will eventually support the budget. Their political space has always defended social investment and progressive policies, and it would be difficult for them to justify blocking a budget negotiated between the PSC and ERC.
At the same time, the role of the Comuns remains important because they may still try to obtain concessions from Illa before giving their final support. Housing policies, environmental measures and social spending will likely be at the center of those negotiations. The Comuns will want to show their voters that their support is not automatic and that they can still influence the final content of the budget.
Even so, the broader political message is already clear. Catalonia may be entering a new phase in which large agreements between progressive parties become possible again. After years dominated by identity clashes and institutional deadlock, the focus is slowly returning to management, public services and economic priorities.
For Illa, this is exactly the image he wants to project: a serious and pragmatic leader capable of governing for all Catalans. For Sánchez, it is proof that his political strategy of dialogue can still succeed despite criticism and electoral setbacks. The Catalan budget agreement may not solve all the problems facing Spain or Catalonia, but it clearly marks a new direction in the way politics can be conducted.
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