The Government saved this Thursday in Congress the first hurdle of the General State Budgets for 2023 when the amendments to the totality presented by seven parties were rejected. Thanks to investiture bloc (ERC, PNV, EH Bildu and other minorities), Pedro Sánchez faces the last year of the legislature without the smudge of seeing the accounts lying down on the first vote. Beyond what it means for the stability of the coalition government, the green light given this Thursday to continue processing the Budgets is important because of what it means to be able address the current crisis without having to extend the 2022 accounts. The opposite implies readjusting some items of income and expenses for a situation for which they were not designed, and an undesirable slowdown in procedures. It is always preferable to govern with updated budgets.
But the path of these Budgets will still be long, politically and economically, before finally approving them in December. More than ever, it has come time to negotiate and convince. The first -getting the ‘yes’ from the usual partners to carry out the accounts- seems easier than the second -that these are credible-, when the income and expense figures for 2023 are based on a macroeconomic picture much more optimistic than what most of the organisms foresee, including the Tax Authority itself (Airef). If it is already risky to make forecasts, it is even more risky to do so with the current inflation and energy crisis, which depend more on the evolution of the war in Ukraine than on the margin of action of the different governments. But estimating economic growth of 2.1% for next year, as the Government maintains, when Airef places it at 1.5%, the Bank of Spain at 1.4% and the International Monetary Fund (IMF) at 1.2%, it reduces the credibility of these Budgets. Spain could enter a technical recession in the fourth quarter of 2022.
The 2023 Budgets have been defined as expansive due to the increase in social spending. The actions aimed at alleviating the burden of the crisis on the weakest layers of the population are clearly positive (increase in pensions of around 8.5%, tax credits for low incomes, the self-employed and SMEs, free subscriptions to Renfe, etc.), although in other tax measures, such as the new “solidarity tax” on large fortunes, it can fall into the propagandist simplification.
The budget bill must now go through the processing of the partial amendments. That is where the PSOE and United We Can Government must negotiate (it has already begun to do so) with the different groups to get their accounts forward. The commotion as a result of the statements (later nuanced) of the Minister of Finance, Maria Jesus Monteroon the Government’s commitment to bring to Congress a reform of the sedition crime, gives a good example that several factors come into play in these negotiations. Esquerra, like the PNV, EH Bildu and other parties, will assert their votes. Get into the parliamentary game. But beyond the exchange of cards, it would be desirable that the deputies work so that these budgets have a credible economic base so that they fulfill their promises as far as possible.