Sánchez Goes On Vacation With More Spending, More Taxes And Without Reforms

Sánchez closed the political course in Salamanca -at the expense of the sectoral meeting of the Treasury and the bilateral meeting with Catalonia on Monday with the same feeling of good balance that he manifested on Thursday of this week when he gave himself a medal for vaccination and another for Economic recovery.

But the truth is that the course turns off with more shadows than lights and with a disconcerting horizon, since it does so with the highest spending ceiling in the historical series, with a skyrocketing public debt, without fiscal rules, with the creation of 30,000 new public jobs, the possible increase in the Minimum Interprofessional Salary at this time and, with an unresolved package of reforms, including labor, pensions, regional financing, tax reform or the Housing Law. It is about reforms, where,

There, in Salamanca, the President of the Government appealed again to the unit, and announced that of the 19,000 million that Spain will receive from Brussels from Next Generation funds , 55% will be managed by the Autonomous Communities.

However, he did not explain how and in what way, while they transcend changes of criteria and even actions to adhere to the position of the Government, in case of wanting to receive European aid.

In that environment, Sánchez also announced the arrival in August of 3.4 million Pfizer vaccines. But the dissemination of the vaccines did not extinguish the flame in this meeting with the autonomous barons, where the disagreement with the change of criteria used in the last distribution of additional aid of 13,412 million euros was revealed, banishing the application of 1.1 of GDP, by the adjusted population.

The increase in the SMI this year has provoked the opposite response from the company
In this summer period, the rise in the SMI has undoubtedly been one of the latest controversies. It comes when everything presaged that Nadia Calviño had imposed her criteria of containment on public spending, waiting for a better economic moment for the employers, who are the ones who support the social contributions of the workers.

But it was this week when the first vice president herself, head of the Economy portfolio, opened the space that Yolanda Díaz demands, and through which another rise in the SMI can be sneaked.

Damage to employment
In that sense, Funcas already warns of the incidence that it may have in the service sector, which is where salaries are low, so it considers that this announcement, right now, constitutes an error.

Lorenzo Amor, president of the Association of Self-Employed Workers, thinks that the rise in the SMI will bring damage to employment, because even, many self-employed and small companies have not seen the horizon of recovery, and raising the SMI for some activities is counterproductive.

For Miguel Garrido, president of the CEIM employers’ association, the first thing is recovery, so that “increases in salaries for civil servants, pensions, the SMI, an increase in the spending ceiling and 30,000 new public jobs” do not contribute more wealth.

Whitout deal
For now, in traffic jam mode is the labor reform. Without social dialogue, to date, the national employers’ association, CEOE, opposes the latest proposal made by the Minister of Labor. Moreover, its president, Antonio Garamendi, even said that it is an unacceptable, ideological and interventionist reform, and with another perspective, he demands that said reform be aligned with the reality of the business fabric and of working people, and also in accordance with the country recommendations of the European institution.

The problem is not minor. This is the first major reform of which Europe demands the agreement and consensus of the social partners in exchange for receiving the new European funds corresponding to that milestone. Because if this is not achieved, Spain could stop receiving this aid.

In similar circumstances is the pension reform. This reform begins in a real way in 2022; Because up to now, only friendly aspects of the reform have been agreed upon, easy to agree on and which involve more expense for the State. That is to say, a sensu contrary to what Europe is asking for in exchange for the funds. Therefore, the measures that may lead to downward variations in the pension are now beginning to be negotiated.

The first touchstone will be in the negotiation of the new factor of intergenerational equity that has been given until November 15 and that already has the rejection of employers and unions. And so, and facing 2022, the extension of the pension calculation period and the self-employed contribution reform are pending.

The other major subject is tax reform, pending as it is the report of the Council of Experts, a creation that is counted as a target sent to the EU in exchange for Next Generation aid .

Well, according to the statements of the members of the Government, the forecast is that the Executive ends up imposing a fiscal harmonization – as its investiture partner, ERC wants -, subtracting powers from the autonomies. Thus, and according to tax studies, if this harmonization was applied, using the Catalan recipe, each Madrid household would end up paying 2,001 euros a year.

It should be remembered that the Committee of Experts dedicated to studying tax reform in Spain is made up of a large group of university professors, and its president is Jesús Ruiz-Huerta, president of the Alternative Foundation, laboratory of the economic policies of the Socialist Party, reason by which it is understood that among the conclusions will be the fiscal harmonization with tax increases and state intervention.

Not in vain, the Government is gestating among other taxes, already for the second stage of the year the global minimum for the Corporation tax, a levy on tolls, plastics, waste, as well as the Google and Tobin tax, whose permission has already been given. for payment to the Basque Government

The other of the reforms, which today has communities facing each other is that of regional financing. On this matter, sources from the Ministry of Finance – just while the president was meeting with the regional presidents – indicated that he expects that in the second half of the year progress will be made in some concepts of the reform of the autonomous financing system such as the composition and the weight of the variables of the adjusted population.

In this section of unfinished reforms is the Housing Law, stuck in the negotiations between United We Can and the Socialist Party, when the intention was to have it approved in March. Still pending in Congress, the setting of the rental price is being the great obstacle, especially when Europe asks for legal certainty.

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