Sánchez promises 360,000 new jobs and social measures worth 5.4 billion

• In 2020, the acting Government commits to Brussels to increase 0.9% in pensions and 2% in the salary of civil servants
• Opinion: End of cycle: the economy will return for years at the pace of 2014

The Government of Pedro Sánchez sent the 2020 Budget Plan to Brussels yesterday, a document that includes a series of balances, promises and forecasts that seems to be truly complex to carry out. Namely: the commitment to raise pensions and public salaries despite being in office; and raise spending on social measures up to 5,400 million euros while reducing the deficit and, for now, taxes are not raised; or guarantee about 360,000 new jobs as a result of a job creation pace that will hardly suffer despite the economic slowdown.

Especially striking are the estimates made on this last point, with a rate of job creation that this year will grow to 2.3%, to slow down three tenths the next, up to 2% and “in line with the moderation in growth of the activity". The sources specialized in macroeconomic analysis consulted yesterday were unable to find in the Government document a reasonable explanation as to why the labor market will maintain growth rates higher than those presented by the economy as a whole, not in vain the new and slightly moderate forecast Growth for 2019 is 2.1% and 1.8% for 2020.

The doubts were extended when remembering that the capacity of creation of employment of the economy is reduced drastically with economic growths inferior to 2%, and that the tool that allows to make more flexible this norm is precisely the labor reform of 2012 that the Government has promised to modify. However, translated into figures, the forecast prepared by the Ministry of Economy means that the labor market will reduce its capacity by approximately 45,000 jobs compared to the current year, so that the commitment of the Pedro Sánchez economic plan is estimated in the creation of 350,000 jobs and up to a total of 367,000 .

The technical department of the human resources consultancy Adecco points to 350,000 jobs as the most reasonable forecast as long as there are no events such as an abrupt departure from the United Kingdom from the European Union on October 31. Although he points out that the context is decelerating, he rules out that in 2020 there will be a crisis such as that of 2008, among other reasons "for the reforms that have been carried out" since then, but Adecco adds that "if you want to protect job creation would have to adapt the labor reform ».

Committed expenses

As for the committed expenses, most of them correspond to the rise in public salaries and pensions. In the case of civil servants' salaries, the increase will be a fixed 2% plus 0.3% of the additional funds, as agreed in the multi-year agreement that the union representatives signed with the previous Executive. In addition, the Government of Sánchez undertakes to carry out the salary equalization of the State Security Forces and Bodies, so that the total disbursement for these actions will be 3,264 million . Pensions, on the other hand, will register an “increase based on the CPI” and will increase 0.9%, an action that Employment estimates at 1,404 million .

In order to carry out these improvements, it is necessary, in principle, a General Budget of the State that contemplates them or a Government with full capacity to act, assuming both that Sánchez does not comply. However, aware of the importance of pensioners and officials at the polls, the Socialist Executive estimates that if Sanchez wins the elections next November 10 and can form a government in December, he would have room to approve both actions in December. And if that were not possible, it also contemplates the approval of a decree even if it remains in office, taking refuge in the "extreme urgency and necessity" of the increases .

Likewise, the Budget Plan contemplates an additional disbursement of 336 million to carry out the extension of the paternity leave, which next year will go from 8 to 12 uninterrupted weeks, “expandable in cases of multiple births in one more week for each child from the second ». And another 400 million of the recovery of the unemployment benefit for over 52 years that, although the Government estimates that it will report 200 million to the Social Security for the increase of contributions that entails, raises the final figure committed for social measures to 5,400 million pointed.

Growth and deficit

Back to the macroeconomic picture and, specifically, to the growth figures, it is still equally striking that the new growth figures contrast, and much, with which the main study services have published recently. BBVA Research, without going any further, warned this week that the economy will grow by less than 2% this year, Funcas did the same last week and the Bank of Spain warned in its new forecasts that the slowdown is being more intense . But the government seems not to share that vision .

Something similar occurs with the evolution of the deficit. The document signed by the Ministries of Economy and Finance maintains that the budget deviation will be 2% this year, which is the revised upward and self-imposed objective. Most forecasts, on the other hand, point to 2.3% or 2.4%. For next year, the Executive estimates that the figure will be 1.7%, a fact that once again is higher than the official one but that, in this case, it does not seem feasible.

In what there are not many novelties, unlike what happened with the document that was sent to Brussels in April, is in taxation. The reason is that the Government has taken into account at this point that it is in operation and that it has not been able to carry out some Budgets, so that it has not been able to implement its “taxation adapted to the 21st century”. But this does not mean, far from it, that Sanchez has renounced the fiscal increase he wants or the new taxes he wants to set in motion . Moreover, the plan is that, at the moment in which a Government can be formed, these measures will be undertaken and, as is clear from the document sent to Brussels, the Budget Plan will be updated with, this time, the effect of the tax increase.

AIReF endorses the forecasts

The Independent Authority of Fiscal Responsibility (AIReF) published yesterday the executive report on the macroeconomic forecasts of the draft of the 2020 budget plan, in which it endorses the new forecasts of the Government, which has lowered its estimate of GDP growth to 2.1% for this year.

The institution considers the basic assumptions that support the macroeconomic scenario that accompanies the 2020 Budget Plan project "feasible", and regarding the update of the Stability Program 2019-2022, the external environment included in the Budget plan has deteriorated, online with the forecasts of the European Central Bank (ECB) and other international organizations.

On the contrary, the AIReF indicates, the Government's assumptions regarding short and long-term interest rates now represent "greater support" for growth, so that the rates have been revised downwards, while expectations on the evolution of the price of oil they are conservative, being above the most recent forecasts of various international organizations.

According to the criteria of The Trust Project

• Social Security
• State's general budgets
• Pedro Sanchez
• Unemployment

Political blockade Pedro Sánchez maneuver to raise pensions before 10-N

According to the Bank of Spain, linking pensions to the CPI as promised by Sánchez questions the viability of Social Security

General elections Pedro Sánchez has already committed more than 6,600 million to win votes