Important data for the electoral campaign. The acting Government of Pedro Sánchez bequeaths himself or his successor after the November 10 elections l the obligation to undertake in 2020 a structural adjustment of 6.7 billion . Structural means that it must be permanent and specific financial engineering operations are not worth it.
The challenge is colossal, because even with the tax increase raised by the socialist leader in its failed 2019 Budgets, that adjustment was achieved and, in addition, the economic environment is now very different when the slowdown is confirmed . The promised rise to pensioners and officials who are structural increases in spending further complicate the consolidation of accounts.
European Commissioners Valdis Dombrovskis and Pierre Moscovici remind in their letter to the acting minister, Nadia Calviño , that Spain must comply with the recommendation of the European Union to clean up the accounts and, with the plan presented, only an adjustment of 1.2 billion is expected , so that 6,700 are missing to reach 0.65% of the Gross Domestic Product requested.
The electoral program of the PSOE does not contemplate such adjustment beyond a diffuse tax increase and, nevertheless, a sharp increase in spending. According to the Brussels technicians, another error in the budget plan submitted by the Government on October 15 is that it does not respect the spending rule. Specifically, it exceeds 13,000 million in 2020 by quadrupling the recommended growth rate. The European Commission believes that the State, which spent 457,800 million in 2018 and intends to raise it to 475,000 million, when it should not exceed 462,000 million. The Government alleges that if it were not for its containment measures, the expenditure would not have increased to the criticized 3.8%, but at a rate close to 4.5%.
As for the debt, the European Commission maintains that the projections sent by the Government themselves ensure that it is lowered from the current 98% to 88.7% in 2022 (about 120,000 million less).
The acting Minister of Finance, María Jesús Montero , considered the problem of adjustment for 2020 to be corrected on Tuesday, if the PSOE wins the elections, through new Budgets to introduce "the new tax figures . " He did not specify which ones and the socialist electoral program leaves in the air if he will apply the fiscal punishment to diesel and the so-called Google Rate, which are two of the levers he tried in the past before the dissolution of the Cortes at the beginning of the year.
Montero herself acknowledged that, if nothing is done, the public deficit will not fall in 2020 below 1.7% when the commitment itself is to lower it to 1.1% of the Gross Domestic Product from the current bar, higher than 2%. The European commissioners do not mention that they have accepted the goal softened by the Government of 2% of GDP this year , but rather emphasize the structural adjustment. That effort should have already occurred in 2019, but not only has there not been the adjustment of at least 0.4% of the GDP promised by Calviño, but there is deterioration.
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- European Comission
- Maria Jesus Montero
- European Union
- Pedro Sanchez
- Nadia Calviño
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