The formation of a new Government, which begins this week with the consultations of the different parliamentary groups with the King, Felipe VI, will lead to an inevitable meeting of the main economic challenges that will go through a very difficult ‘sudoku’ between cutting public spending to lower the structural deficit below 4% of GDP and “paying the Catalan bill” or the nationalist groups that support PSOE or PP in that process. That is the main conclusion reached by the main economic and political analysts consulted by extra ero to the public treasury.
Waiting to find out if the left or the right will first be in charge of going through the trance of trying to form a government, after the formation of the Congress Table under the control of PSOE and Sumar, everything indicates that the best options for achieving a majority of 176 seats to lead the country for the next four years goes through Pedro Sánchez and Yolanda Díaz, although the party that won the elections, the PP of Núñez Feijóo, has not stopped looking for its way to avoid a new period ‘san pure ‘controlled by the Basque and Catalan separatists. The negotiating key that Junts or the PNV now have does not prevent the economic problems from persisting – as the leader of the PP has recalled – and the new legislature has to face a period in which the adjustment measures can be unpopular and very difficult to explain to citizenship.
One of the basic economic keys will be in the management of the European funds that are yet to arrive and the necessary adjustments for this committed in the Recovery Plan agreed with Brussels. Spain has already received three payments of the first 70,000 million from the EU in non-refundable funds (just over 37,000 million euros), although the slowness between the definition of the projects and the specific calls to execute them has been very slow so far. . The achievement of a greater cruising speed of the management will be loans, 7,700 million additional transfers and almost 2,600 million euros will arrive from the new
For economists like José Carlos Díez, the challenge for Spain in the next four years continues to involve recovering productivity and raising wages, stagnant for 15 years; promote technological development and digitization; and continue with the energy, water and electric mobility reforms, “and the EU funds will reduce these three points in a transversal way”, he recalls. Faced with this, experts of the stature of Antonio Merino warn that the main short-term stumbling block is approving budgets for next year, in which it is guaranteed that the economy grows and the deficit is reduced by one point by 2025. , until leaving it at the 3% imposed by European tax rules.
simply unavoidable
With the GDP data from the past, the necessary spending cut that Spain has to apply would be close to 25,000 million euros in two years, with a Public Debt that has already exceeded 1.5 trillion and earned interest will soon exceed 2 % on average, which means an increase of between 12,000 and 15,000 million euros a year in financial expenses, until accumulating a bill of close to 40,000 million in what is known as ‘Debt service’, a level that is not I had known since the great financial crisis ten years ago.
The doctor in Political Sciences from the International University of Valencia Anna Isabel López to pay a “nationalist toll of which, for now, we do not know how or how much it will be”, and that will not be known until it is seen reflected in a General State Budget, whose approval can be very complicated. “It is time for parties like Junts and the PNV -he explains- with a management in which the financing of territorial policy will be present at all times”, not only by the nationalist parties, but also by other regional governments that are to claim his own.
In this context, a hypothetical PP government with the support of the PNV and a large part of the autonomies with similar executives will have to go through a toll that, perhaps, would be less complex than that of a PSOE coalition with nationalists, independentistas and CCAA of the PP putting their political and investment claims on the table. Canceling a part of the debt of the Autonomous Liquidity Fund (Catalonia alone accumulates 60,000 million) is something that the socialist party is already contemplating, although this will not reduce the weight of the cost of the Debt in the state accounts.
All the analysts consulted agree that it will be in the PGE that can be drawn up where the specific formula is known, although it is clear that a left-wing government will put much more pressure on citizens and companies with new taxes (green taxes, tolls on highways or on energy consumption), while the tax burden of a right-wing executive is assumed to be lower.
Complicated deal policy
“The policy of agreements has been around for a long time, but now the variable geometry in Congress disappears” “Before, there were Ciudadanos, which allowed the Government to have alternatives when the ERC, Bildu or PNV refused to agree. In their place, now they are created two very large blocs and the only option that the new collaboration government has to take initiatives forward would be to get all the parties located outside the PP and Vox bloc to vote yes”. THIS CHANGE Adds Difficulty to the negotiations between partners, but Solís also believes that it can encourage the groups of the nationalist left to be S, because the possibility that the legislature fails and will convene will be very present.
In it, points out the political scientist Eduardo Bayón, who highlights the difficulty of delving into these analyzes when the inauguration of the new Prime Minister has not taken place. “The PP has to decide who this legislature wants to be, how to approach its relationship with Vox, if they consider reaching some kind of agreement on state policies that are usually cited, but right now I see it as very complicated, due to the type of opposition on, the campaign and the frameworks in which it has entered with respect to the current Government and Pedro Sánchez”.
Although both political scientists believe that negotiating with state parties is something new for Junts, a difference from ERC, so their movements will also be marked by which internal faction prevails, if it is the most pragmatic or, by the contrary, the most groundbreaking. In any case, anticipate that in the first conversations for the eventual investiture of Pedro Sánchez, those of Carles Puigdemont will start from maximalist positions that the PSOE and Sumar partners will try to iron out in order to secure a sufficient majority that does not compromise their program. At the same time, it is not ruled out that as the legislature progresses, forces with ideological differences may reach specific agreements, for example, for the introduction of amendments to large projects such as the General Budgets.
