ABSTRACT
This chapter examines three of the main longstanding areas of Basque-Spanish contention over the Concierto: the debate over the Basque contribution to inter-regional solidarity; disputes over Basque-Spanish corporation tax differences; and differing views on how to update the Concierto within the regulatory context of the European Union (EU). Most notably, the unilateral risk that the fiscal model involves for the Basque region and the lack of any guaranteed minimum revenue from central government encourage accountability and responsibility. The bilateral nature of the Concierto has helped to mitigate the problem of inter-regional competition for resources that afflicts the common financing system. The development of the Concierto necessarily involves phases of renegotiation as a result of extraneous developments, which will inevitably continue to bring different conceptions of it into conflict. Finally the chapter considers the implications of the growing difficulty in reconciling different conceptions of the Concierto for the future of Spanish - Basque fiscal and financial relations.
