The businessmen grouped in the Spanish Confederation of Business Organizations (CEOE) have warned today that the project of General State Budgets (PGE) for 2022 that the Government presented yesterday has barely sustainable foundations from a fiscal point of view.
Neither the expenditure, "which is not justified" nor
the income, "which hurts the most internationalized companies"
is consistent with an economic situation in which the intensity of the recovery is in doubt.
The employer maintains that, while waiting to know more details, the Budget project, on the spending side,
"postpones the consolidation of public finances"
while, on the income side, "supposes an increase in the tax burden" . The abrupt turn that the economy has taken at the end of the summer with an inflation that has exceeded all their forecasts does not seem to have been taken into account, in the opinion of businessmen. Neither did the slowdown in economic growth in the second quarter. "The Government should be more prudent in its macroeconomic forecasts, since it has maintained growth of 6.5% for 2021 and 7% for 2022 despite the behavior of the economy in the second quarter, which has cooled expectations."
The PGE presented yesterday establish a level of income that amounts to 232,352 million, 8% more than the almost 215,000 with which the Treasury expects to close this year. In this sense, the employers' association has indicated that business pressure in Spain is 1.5 points higher than that of the EU (11.1% of GDP compared to 9.6%) and the collection from Spanish companies is equivalent to 31 , 9% of total income, compared to 24.6% of the European average. Entrepreneurs are aware that, far from narrowing, the gap can grow. The Treasury has already indicated on different occasions that the Corporation tax must contribute much more than the almost 25,000 million euros that it will contribute next year. For this reason, it is preparing a tax reform that will be based on the recommendations of a group of experts in the first quarter of the year.
Regarding spending, CEOE assures that the PGE project for 2022 places it at maximum levels in many items, something that is not justified in a context of economic recovery and historical maximums of public debt.
"We believe that this expansion of public spending compromises the sustainability of finances in the medium and long term
and mortgages in the future the stabilizing capacity of fiscal policy."
Entrepreneurs also condemn that the spending strategy does not "firmly" bet on economic activities and recall that job creation is in itself also a social policy.
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