Negotiations within the coalition government to approve the General State Budgets are always rushed to the last minute. This is how it was in the Octobers of the last two years and this time it is not being different. Despite reaching a fiscal pact last week, PSOE Y United We Can they are not yet able to reach an agreement on the public accounts for 2023, despite the fact that the Government’s intention is to be able to approve it this Tuesday in the Council of Ministers. The Second Vice President of the Government, Yolanda Diazsentenced late this Monday on Cadena SER: “at this time there is no agreement“, and recognized that the differences with the socialists are “profound”. “I am going to negotiate without leaving the table until the last minute for the good of my country, I hope the PSOE does the same“, he said, without clarifying whether in the next few hours he will meet with the Prime Minister, Pedro Sánchez, to get the negotiations off the ground.

    Socialists and purples were immersed in an intense negotiation until the end of the day and the sensations in both formations were that the agreement was close. Even the Minister of Finance, María Jesús Montero, had ventured to show, minutes before Díaz’s words, her confidence in reaching an agreement in the next few hours, in statements to Efe. The situation is reminiscent of previous negotiations that, with the talks stalled, ended up being resolved with a meeting in Moncloa between Pedro Sánchez and the then leader of United We Can, Pablo Iglesias.

    Díaz did not want to go into the issues that have caused the disagreements between the two partners, although he threw several darts at the Socialists: “I wonder how it is possible that in a progressive government we have to discuss some issues that are obvious.” Sources close to the leadership of the purple party maintain that one of the conflicts centers on the PSOE’s refusal to provide a budget for the family law, promoted by Ione Belarra, to launch a universal baby check of 100 euros monthly or extend six-month maternity leave. In United We Can maintain that the socialists intend to lower many of these proposals.

    The vice president also emphasized the need to reactivate the processing of the housing law, blocked in Congress for more than six months. Díaz maintained that there is no agreement on this rule that was born under the protection of the two previous budget negotiations. In addition, the Sumar leader pointed to other issues that could be tensing the negotiation, such as reverse the PP cuts in unemploymentin such a way that benefits for the unemployed are increased or raise the IPREM (Indicate Public Income of Multiple Effects), which would affect upwards the calculation of the minimum vital income, non-contributory pensions and different regional income.

    taxation

    For now, PSOE and United We Can only have been able to negotiate a fiscal package that, even so, the purple ones find insufficient. Specifically, it includes income tax rebates for income below 21,000 euros, as well as rebates for the self-employed and SMEs, while taxation of capital income above 200,000 euros is increased. In addition, they will promote a law to implement a new tax for assets of more than three million euros. The Executive calculates that, together, these measures will achieve a greater collection of 3,144 million euros in two years (2023 and 2024).

    On the other hand, the project will include the reduction of VAT to 4% on feminine hygiene products, condoms and non-medicinal contraceptives. Both United We Can and the main parliamentary partners tried to introduce this measure in the past public accounts, but were met with rejection by the PSOE.

    The bases

    The State Budget project for 2023 is being built on the basis of a new macroeconomic framework that lowers the GDP growth forecast for next year from 2.7% to 2.1%, according to what the vice president advanced this Monday economy, Nadia Calvino.

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    In addition, the 2023 accounts are falling within the spending ceiling approved by the Government and which was submitted for consideration by the Congress of Deputies on September 22. The Government has set the spending ceiling at 198,221 million euros, 1.1% more than in 2022. Without including the European resources from the ‘Next Generation’ fund, the spending ceiling amounts to 173,065 million, 1.9% more than in 2022. This spending ceiling includes the agreement to raise the salary of civil servants reached this Monday between the Government and the UGT and CCOO, which includes an increase in remuneration for 2023 of 2.5% fixed plus another variable point (up to 3.5%) depending on the evolution of prices and GDP.

    In the Budget figures there will also be a transfer of 19,888 million for Social Security, which represents an increase of 8.1% compared to this year. Above this spending ceiling will be the increase in pensions in 2023 according to average inflation between November 2021 and 2022, a figure that could be around 8%. The amount of the measures against the energy crisis that the Government decides to extend or apply in 2023, such as the extension of the VAT reduction on electricity and gas beyond December 2022, is also above the spending ceiling. , although any of these decisions will be adopted later, as the Minister of Finance María Jesús Montero has been repeating.

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