Montero presents some accounts without the support of the Bank of Spain or the Tax Authority, which brand the calculation to face the crisis as unreal
The third time in three years that the Minister of Finance, María Jesús Montero, begins this Wednesday in Congress the definitive phase so that the State Budgets for 2023 are approved before the end of the year. They will be the last public accounts of the legislature, as the head of public finances has already recalled. And they will have -always counting on the usual last-minute threats of this legislative process that the investiture partners may carry out- with the support of the government coalition groups (PSOE and United We Can), as well as the ERC, EH Bildu or PNV. Nothing seems to overshadow the path that the project still has to travel in the Cortes, despite the criticism it will receive from the PP considering that they are born distorted for being unreal and without awareness of the economic reality that Spain faces during 2023.
The Budget is born economically lame, after the warnings launched by organizations such as the Bank of Spain or the Tax Authority (Airef) a few hours after the text landed in the Lower House at the beginning of the month. The Treasury has not incorporated the uncertainty that hangs over the economy, in the opinion of the great economic institutions of the State. In fact, the technicians of the banking supervisor and the prosecutor speak of public accounts riddled with “deficiencies” and point to the “risk of deviation”. And they are based on much higher growth forecasts than those already raised by the OECD or the IMF, with increases in GDP of 1.5% and 0.7%, respectively, compared to the 2.1% estimated by Economy. Much of the criticism is due to the extraordinary collection that the accounts will obtain next year derived from the rise in prices and the impact that inflation will have on all tax revenues, especially VAT.
Barely 24 hours after Montero presented the bill in Congress, the governor of the Bank of Spain, Pablo Hernández de Cos, warned of the impact that measures such as the revaluation of pensions with the CPI (they will raise a 8.5%) or the highest disbursement in interest to pay a public debt that is already close to 1.5 billion euros. And this without taking into account that unemployment can grow -with it, spending on benefits- if the recession goes beyond the first quarter of next year.
The governor spared no criticism because, in his opinion, “the impact of inflation on public spending will begin to be significant as of 2023.” He called for “prudence” when forecasting “increases in collection due to unknown factors.”
The Fiscal Authority -the independent body of the State in charge of overseeing public finances- has also indicated that the Budgets include “deficiencies in informative quality”. Its president, Cristina Herrero, came to criticize them for being too “prudent” in terms of forecasting income. The State can collect much more than it estimates, as an effect of high inflation.
Even businessmen, through the Institute of Economic Studies (IEE) have rejected the public accounts because they place the fiscal pressure on companies at maximum levels. They consider that this dynamic is going to weigh down competitiveness and employment, which they do not rule out that it will contract.
A ‘Yes’ to “social” measures
But in these first weeks of parliamentary proceedings, Montero has been more attentive to preventing the usual members of the Executive from presenting an amendment to the entirety than to refuting the economic and financial criticism of their Budgets. In fact, he has come to disdain Airef’s warnings by clarifying that he was surprised by that criticism “for being prudent.” «I prefer to stay with that criticism than not when it is made in the opposite direction», he has come to affirm.
In the final decision of the partners, the social impact of some of the measures included in the project weighs more than the business criticism or the assessment that is pending from both Brussels and the European Central Bank: the new tax on extraordinary income energy companies and banks in the next two years; the tribute to the great fortunes, which will act as a substitute for the almost extinct Patrimony through the regional route; or the rise in income for taxpayers with higher incomes.
#Government #today #launches #latest #Budget #political #endorsement #financial #backing