• Coalition Agreement: The Government of PSOE and Podemos omits the economic slowdown
  • Pact: This will affect the economic impact: more taxes for the pocket and more workloads for companies
  • Increase: An agreement with 35,000 million more of annual expenditure

“The State and the Autonomous Communities may not incur a structural deficit that exceeds the margins established, where appropriate, by the European Union for its Member States. An Organic Law will fix the maximum structural deficit allowed to the State and the Autonomous Communities, in relation to its Gross Domestic Product. Local Entities must present a budget balance ».

This is section two of article 135 of the Spanish Constitution , which was expressly reformed by the Government of José Luis Rodríguez Zapatero in 2011 , urged by its European partners, to give maximum legal support to the concept of budgetary stability.

It was a very critical moment for the Spanish economy and the Socialist Government took forward in record time, with the parliamentary support of PP and UPN and without having to make a referendum, a reform of the Constitution that guaranteed investors that the State was committed to face the payment of the public debt over any other expense. A historic renovation for its speed ... and with small print.

And it is that the new wording of section two, the above mentioned, which de facto makes any budgetary wording that does not include the adjustments proposed by Brussels de facto , would not come into force until several years later, the then distant January 1, 2020

But that remote horizon was fulfilled last Wednesday. And there are already red lines on the table marked by the European Commission. Brussels expects the Spanish Government for this year an additional adjustment of 0.65% of GDP to correct the country's structural deficit; the one that does not take care of the deviations own of an unexpected fall of income or of the economic cycle but that responds directly of the political decisions.

The Commission warned after receiving the latest budget draft that Spain's structural deficit continues to grow and calculated it at 3.2% of GDP for this year , so it considers it necessary to reduce it, at least, in that quoted 0.65%. This adjustment proposed by Brussels already involves some 8,000 million in the next General State Budgets - the Accounts drawn up by Cristóbal Montoro for 2018 are currently extended - and seems to complicate the fulfillment of the economic program signed between the PSOE of Pedro Sánchez and United Podemos of Pablo Churches

The program of the Coalition Executive agreed between the two formations - presented last December 30 without an economic report underpinning it - contemplates an increase in spending of at least 35,000 million and collection forecasts, with a rosary of tax increases, that they can't do as a counterweight.

The document Progressive Coalition, a new agreement by Spain of PSOE and United We can collect the express commitment to "compliance with fiscal discipline mechanisms to ensure the sustainability of public accounts", ensuring that the future Government will develop "a responsible fiscal policy , which guarantees budget stability and the reduction of the deficit and public debt ».

However, several of its core programmatic measures involve a significant increase in public spending - the revaluation of pensions with the CPI, the rise to civil servants, the increase in health and education spending ... - and the announced fiscal increases, With new taxes included like the Google or Tobin rate , they don't seem to be enough to balance the accounts.

According to the criteria of The Trust Project

Know more

  • GDP
  • European Comission
  • Christopher Montoro
  • European Union
  • UPN
  • State's general budgets
  • José Luis Rodríguez Zapatero
  • Google

EconomyThe red lines of the Bank of Spain to PSOE and Podemos: deficit and pension control and progress in labor reform

ReactionsThe company, against the PSOE and Podemos pact, "closer to populism than to economic orthodoxy"

CompaniesThe great stock exchange paradox of the Saudi oil company: up 15% and triple the value of the Ibex in full green transition