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César Colino

The goal of this chapter is to understand better the processes of formal constitutional or territorial reform of federations and multilevel systems. The chapter defines and operationalizes the dimensions of territorial reform regarding reform as a particular public policy that follows specific policy paradigms. It then reviews several factors accounting for its occurrence, contents and decision outcomes. Different factors of an explanatory model are presented, seeking to establish causal mechanisms and hypotheses. Unlike the usual perspective on change of federal systems that looks at evolution and long-term development, this perspective considers change over the short term and understands it as an intentional policy designed and adopted by governments and parliaments. The chapter concludes with some reflections on the usefulness of the model and the relative importance of the different groups of explanatory factors.

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César Colino and Eloísa del Pino

While some of the literature on the Spanish system had repeatedly pointed out several centralizing trends and mechanisms within the territorial model, not much of it had been able to show convincingly any formal shift of authority towards the centre in the last decades against the backdrop of clear decentralizing tendencies in powers and resources and increasing regional policy-discretion for most sectors of public activity. Also in the wake of the first stage of the 2008–9 financial crisis, the stimulus phase, little formal change and shift of authority was observed, since the central government had plenty of constitutionally entrenched financial and regulatory powers to deal with it and regions largely supported centrally managed stimulus measures. During the second phase of the crisis, however, we are increasingly observing that the policies of austerity have exposed the system to centralizing pressures that have been translated into some formal constitutional and statutory changes that are already having an impact on the autonomy of the autonomous communities (ACs) and on the type of distributive conflicts, which in turn has exacerbated some centrifugal tensions such as secessionism in Catalonia. Conflict between counter-cyclical measures of some regions and the centre has ensued, and demands for fiscal federalism reform increased. Through the combined effect of the international credit markets, the EU authorities’ demands for fiscal consolidation and the centralization measures of the central government in response, Spanish regions seem to be losing most of their financial autonomy and discretion and intergovernmental, fiscal and other relations seem to be transforming into a less cooperative model. Without changing the constitutional division of powers, the centralization of the system implied by these developments has affected the autonomy of elected regional governments and their accountability before their citizens, as well as the stability and legitimacy of the whole system. The chapter describes all these effects of the crisis, seeking to contribute to the growing comparative discussion on the effect of the current crisis on federal systems and fiscal federalism, their stability and fiscal sustainability and at the same time to contribute to the ongoing debate on the workings, effectiveness and the future of the Spanish Estado Auton—mico. Although Spanish federalism has been faced with several accommodation and efficiency challenges before, currently it has to deal with a combination of fiscal and political problems thus far unknown to it: stagnation and fiscal crisis, alongside increasing economic divergence among regions and the strengthening of traditional centrifugal forces in some ACs.