Pedro Sánchez himself recognized yesterday, in the presentation of the new package of social measures that fiscal consolidation, that is, reducing the deficit and public debt, It is a “duty” for the Government. That’s right, and even more so if it declares itself progressive like yours, because the guarantee of being able to finance healthcare, education or pensions depends on this cleaning up of public accounts. Duty or not, it is known that It is an obligation established by the European Union, which believes that the crisis that allowed a high level of public spending is over. The ‘social shield’ cost the State 22,000 million euros in 2022 and 15,000 in 2023 and that is, in part, the reason why it has had to be reduced to 2024, the year in which an economic slowdown is expected and in which the deficit must be reduced to 3% of GDP and the debt to at least 106%. Nevertheless, The President of the Government believes both objectives, fiscal consolidation and social aid, are compatible. At best, this is an exercise in optimism. At worst, a concession to populism condemned to come face to face with reality.
Given this economic outlook that appears gray, plus the fiscal obligations contracted with the EU, but thanks to the fact that inflation has dropped to 3.2% and the price of energy has moderated, the Executive has ensured that the recovery of taxes on electricity and gas is not immediate but gradual. The VAT on electricity is raised from 5 to 10% throughout the year and that of gas only until spring, when it will go to 21%. These increases will allow the State to recover part of the tax revenue lost with the reductions. That is surely also the reason that has led Sánchez to extend taxes on financial and energy companiesalthough the latter may deduct investments in large industrial projects and decarbonization.
It is worth asking whether it is appropriate to maintain the measures that benefit all groups without any distinction, something questionable of origin, as is the case of aid for public transport in the form of free Renfe Media Distancia and Cercanías subscriptions and 30% subsidies for interurban lines, to which the communities must contribute an additional 20%. The decision to maintain the reduction of VAT on basic foodstuffs to 0% and to 5% on oil and pasta ends up having a more effective weight in the shopping basket of families with fewer resources, but still Thus it remains an indiscriminate benefit, rather than an emergency measure for the most vulnerable. This tax reduction is of no use, furthermore, without mechanisms to control whether it has an effect on the final price, and so far there is no knowledge that these inspections have been carried out. It is a measure more proportionate the discount on the electric social bonus, aimed at consumers with the lowest incomes, aimed at alleviating energy poverty.
Sánchez assures that the Spanish economy is on “the right path” and that it shows “solidity and strength” despite the uncertainty of the international context. Optimism or populism? Neither one nor the other, which will not be easy the pressures to which the fragile majority that supports it will be subjected, should lead him not to abandon the prudence essential for the public accounts to balance.