Sanchez will end on a legislature marked by the adjustment of the deficit


Javier TahiriSEGUIRMADRID Updated: Save Send news by mail electrónicoTu name *

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A road map, not a written one of the rulers in Spain is that it is advisable to make the adjustments at the beginning and saved the tax giveaways for the end of the legislature with a good taste in your mouth and close the polls. However, the epidemic has swept up with this maximum, and the president of the Government, Pedro Sanchez, will face a legislature in which you alter the order of the factors and, predictably, the adjustments should arrive at the end of the mandate . The Reconstruction Fund will deploy a 140,000 billion for Spain, of which 72.700 will be in the form of transfers. The conditionality comes through the specific recommendations that the European Commission through the european semester. And in the last, Brussels already gives a hint that, with the economy (and health) in state delicate, does not require any settings, neither this year nor the next , but there is a need to pose the scenario to when you have recovered the activity enough and have to clean up a public accounts in critical status.

When the economic conditions allow, , apply fiscal policies designed to achieve tax situations are prudent over the medium term and ensure the sustainability of the debt, at the same time encouraging investment”, requested the Commission, in its recommendations, individualized by country in the past month of may.

Brussels activated the safeguard clause of the Stability Pact for not applying the fiscal rules this year -those that are set as limits to 3% of GDP deficit and 60% public debt – and it’s not likely to apply them the next. However, the Independent Authority for Fiscal Responsibility (Airef), has already warned the Government that it will be convenient to go, preparing the groundwork of the adjustment to 2022 , when you will have to go beginning to adopt measures that reduce an imbalance that this year, the administration expected to end up in 10.3% of GDP -although the Bank of Spain warning that if there is regrowth it will go to 14%- and a debt that will be multiplied by 95.5% to 115,5% –if the supervisor believes that, in a scenario more negative, it can scale up to 126,7%–.

The last recommendation that came to Spain in the european semester before the outbreak of the pandemic in 2018, calling upon the Government to limit the rise in expenditure to a maximum of 0.9% and an annual structural adjustment of 0,65% of GDP: in 2019 the first rebounded 4.4% and instead of adjusting the 8,000 million that called for Brussels, the deficit engordó in other 8,000 million more. How and when Spain had deficits above 3%, as will happen now, what requested by the European Commission? When we were in the Excessive Deficit Procedure, the final recommendation of Brussels 2017, claiming “taxes on pollution,” and reminded the Government the gap of collection that the VAT had with the EU average because “Spain applies very widespread exemptions or reduced rates” .

The VAT was admitted 6.6% of GDP in 2018 compared to 7.1% of average continental. And while income TAX, the gap is higher (9.7% of the GDP, as compared to 12.2% for the EU), the experts coincide in pointing out that direct taxes harm more to the activity than indirect. In Societies, the distance is the least of all (2.5% of GDP in revenue and 2.7% in the EU): that is to say, the tax increase advocated by the Executive is not the who Europe recommends .

The petitions of Brussels rather they are directed to evaluate public spending and tax exemptions, as it has done the Airef in a study that begins to present today. On 13 tax benefits remaining 35,000 million in revenue in VAT, income TAX; corporate and Special; in addition to evaluate 16,000 million of pharmaceutical expenditure, recruitment incentives, and infrastructure that represent a 4% of GDP. Some ideas that the Treasury already announced that it will incorporate the accounts of the next few years. The Budgets that will test the coalition Government will not be the 2021, but those that include the first adjustment.