There are bubbles that can see the needle that will prick them coming from a distance. The Government of Pedro Sánchez will go down in history for multiple reasons, but what no one expected at this point is that it would do so due to the shadow of the corruption that it displayed and flagged in May 2018 to promote a motion of censure against the previous Government of Mariano Rajoy. The ‘Koldo case’ (Operation Delorme) has uncovered a plot of million-dollar illegal commissions, money laundering and embezzlement of public money that goes back to the same Moncloa command center in the Covid-19 crisis of 2020, which was led by a quadriministerial committee with José Luis Ábalos (Development), Fernando Grande-Marlaska (Interior), Margarita Robles (Defense) and Salvador Illa (Health). It is the same government team that took about a month to react to the pandemic and will have to give explanations in court for the alleged crimes committed then and negligence then.
The lack of respect for public money transcends the ‘cold case’. It not only affects the corrupt and criminal but also all those responsible criminals who covered them up, Mirran Parah Ladro or NEGLIGENTLY signed the COMPPPA for masks at Preco de Oro in 2020, which were then not even used because no one was in charge of carrying it out. A minimal review of what was purchased. The false departure of Ábalos from the Government of Sánchez’s exemplary character now has the first explanation with some sense. His permanence since then as a PSOE deputy and unofficial spokesperson on television is not exactly the “whoever falls” that the president has claimed. According to his own version in the book ‘Resistance Manual’, Koldo was one of the key people in gathering and guarding the endorsements that brought him to power in the PSOE. Is that cynicism that resonates in Moncloa and Ferraz?
Debt and respect for public money.
The management of public money is the most important issue in this scandal, beyond the looting of a corrupt gang. Until now, international investors were sold an impeccable record in public affairs management that is now beginning to have increasingly visible stains. Sooner or later it will have consequences because corruption is found in the markets and society. It makes creditors ask questions and strikes a chord with taxpayers who pay the bills with their fiscal efforts. The Government of Pedro Sánchez has added nearly 400,000 million euros of public debt since 2018, to exceed 1.5 trillion euros. The main argument to justify that this increase in the loss borne by public accounts is good news is that the debt/GDP ratio is reducing, from almost 120% to 107% of the last reading.
Theoretically, the relationship between the public debt and what the country’s economy produces over the course of a year measures the ability to repay what is owed, but investors are also looking at other ratios that are what really measure the whether or not the current Government is managing public money well. Firstly, the public deficit, that is, the level of gap between what is spent and what is received in operational terms throughout a budget year. Secondly, and even more important, the comparison with collection. The fiscal ratio between tax revenue and public debt remains the same now as in 2018, despite the fact that the Treasury has increased its collection by 38% in six years, to almost 270,000 million euros in 2023, 74,000 million more.
The debt/tax ratio remains around 590%, meaning they would need seven years of income to pay off all the debt. What will happen when collection stops growing? What will happen if there is a recession? The taxpayer not only seems to be exhausted, but is probably fed up with seeing how, after the tax pressure has not stopped rising, spending increases even more rapidly. It is a lack of respect for everyone, no matter how much it is disguised as social spending that is not. “We are handling public money, and public money belongs to no one.” The new president of the Council of State and former minister, Carmen Calvo, coined this hurtful statement (May 29, 2004, ABC newspaper), which reflects the idea of impunity and irresponsibility that sometimes swarms in the heads of rulers, advisors and close. Only six years later, that Zapatero Government of which Calvo was a part lost control of the public accounts that led to the rescue of Europe in 2012 due to the inability to refinance the debt.
Since Sánchez took office in Moncloa, the fiscal effort of households and companies has been immeasurable. In 2023, personal income tax contributed just over €119 billion to public coffers, 55% more or €42.3 billion in five years. In terms of Corporate Tax, the increase is 44% in the same period, up to 33.4 billion. In VAT, from 30% to a record of 83,000 million. Complaints from anonymous citizens usually fall on deaf ears, which is why the complaint expressed last Thursday by Ignacio Sánchez-Galán (Iberdrola), one of the most powerful executives of the Ibex 35, about the fiscal excesses of the current government is especially relevant. : “When we closed the accounts and I saw the figures, I was impressed. We pay more taxes in Spain than our personnel expenses, financial or maintenance costs combined… Some taxes are temporary, but others remain as the tax on income. No “It makes sense. In any case, it doesn’t make sense. We pay 38 different taxes, 18 central and another 20 regional… well, actually 22.” It seems reasonable to think that he is right.
