The Council of Ministers approved this Tuesday the addendum to the Recovery Plan, which will allow Spain to receive the fourth disbursement of European funds, of some 10,000 million euros, and which will also allow the Government to request another 94,300 million euros from the Next Generation (84,000 million in loans, 7,700 in additional transfers) and the new RepowerEU program (2,600 million). The Foundation for Applied Economics Studies (Fedea) has published this Monday an article very critical of the reforms included in that plan.
In the ‘think tank’ considering that the balance of the same is being “very disappointing”, since some of the new regulations point in the opposite direction to what would be desirable, while others are almost empty of content or fall short in necessary use. Thus, he warned that in the last two and a half years numerous legal norms have been approved, respecting the established schedule, although “at the cost of excessive use of urgent procedures that may have had a negative impact on their quality.”
“Unfortunately, the balance of these reforms is still very disappointing,” the Foundation said in its report. Specifically, Fedea mentions in his report two of the most paradigmatic and worrying cases of “badly planned” reforms. The first is the reform of the public pension system, already analyzed in various documents of the Foundation. In his opinion, this reform should have had as one of its central objectives to guarantee the financial sustainability of the system and has ended up having the opposite effect, “by introducing a series of provisions that will put strong upward pressure on spending without accompanying them of adequate compensatory measures”.
Even with the new MEI safeguard clause, which will force social contributions to rise “sooner rather than later” to partly finance the increase in spending, Fedea has warned that the foreseeable effect of the reform will be a sharp increase in the basic deficit of the pension system during the next decades whose financing will absorb a large part of the tax revenues received by the State.
The second of the reforms that Fedea comments on is the housing law, which, seeking in principle to alleviate the problem of shortage of supply that we suffer in this area, “will surely contribute to aggravating it through the withdrawal of the rental offer in the face of a regulation that reduces profitability and increases the risk of this activity”, as they warn.