The Justice Court of the European Union has finaly ruled on the legal controversy about the Basque autonomous tax system, earlier dismantled by the Spanish tribunals.
The ruling states that the tax rules of the Western Basque provinces of Araba, Biscay and Gipuzkoa (confederated in the Basque Autonomous Community) fulfill the requirements of political and procedure autonomy to have different taxation from the Spanish state but is much more ambiguous regarding the principle of economic autonomy. In this aspect it rules that the regional Superior Court (appointed by the Spanish authorities) has the power to determine if the "cupo" (periodically negotiated tribute to Spain) is not used to compensate the income reduction due to lower taxes.
Since the castilian invasion of 1199-1200, the Western Basque provinces (as well as Navarre since its annexation to Castile in the 16th century) had historically a very large autonomy, that did not only include taxation but most legal and administrative aspects, a wide military exemption and even separate tolls. he succesive monarchs had to take oath of respecting and preserving this autonomy upon their ascension to the throne. The four provinces were until the 19th century separate states only loosely federated with Castile/Spain. In 1833 and also later in 1872, the provinces waged two wars (Carlist wars) for the survival of their historical self-rule. The peace accords, signed separately from the Carlist "goverment" (that had no real power of its own), estabilished that these were not going to suffer, yet Spain ignored the agreements and dramatically watered down the Basque autonomy once and again but the separate taxation system persisted all the time.
In the 20th century, after the Fascist regime, the watered down autonomy was constitutionally recognized again but the process of restoration was largely sabotaged by the Spanish institutions systematically. The questioning of the tax autonomy is only one of the last epysodes of this political and legal riff-raff, in this case promoted by the nearby regional governments of La Rioja and Castile-Leon, who do not have such autonomy and feel envious.
The decision by Luxemburg, ambiguous as it is, has been welcomed by both sides, each one arguing it gives them the reason, at last partly. Only the radical nationalists express their feelings as just another epysode of Spanish opression, as it leaves the final decission on a Spanish-appointed tribunal (there are no Basque-appointed tribunals anymore).
The current tax system allows companies to pay somewhat less than in neighbouring Spain, which is considered unfair competition by some Spaniards but an historical right by most Basques. Even the right-wing pro-Spanish Navarrese government has welcomed the ruling, hoping apparently to be able to imitate the Western Basque taxation system (it's almost the only autonomous power Navarre still has).
We will have to wait now for the final ruling of the Superior Tribunal to see what's the end of this soap opera.
Spanish Constitutional Court rejects Basque referendum project, denies existence of Basque People.
Almost simulatenously, the highest Spanish court, as expected, unanimously rejected the possibility of asking the Basque people (Western Basques in fact) about our right to decide and our opinion on ETA. In the ruling the Spanish tribunal rejects the existence of a Basque People and its right to decide anything, on the grounds that the sovereignity belongs exclusively to "the Spanish People" (within which Basques are only an irrelevant 6%).