One of agreement and one of disagreement. The Minister of Economy, Carlos Bodyagrees with the second vice president and Minister of Labor, Yolanda Diazin which there is room to “continue raising” the interprofessional minimum wage (SMI), but considers that it is still necessary to reach a parliamentary agreement and take into account the specific circumstances of different economic sectors, especially SMEss, in order to carry out the reduction of working hours to 37.5 hours weekly that his Government colleague wants to see implemented as early as 2025.
This Wednesday, the Body launched the public appearances by the Government in this new year with an interview in the Chain Being in which there has has been aligned with the proposal being studied by the Ministry of Labor to raise the SMI by around 4%, to place it at what he has assured should be the reference for the lowest salaries, 60% of the average salary in Spain.
“You could keep going up, striving to converge to 60% of the average salary because it is a summary of how the evolution of the economy is going” and to which “workers who have less negotiation capacity and lower salaries have to aspire.”
What he has not agreed with Díaz on is the reduction of the working day. The Minister of Labor wants be a reality this 2025 but the head of the Economy has put the brakes on, because he affirms that the Government at the moment does not have enough support to move it forward in Congress and because this regulation has to take into account the needs of certain sectors and especially the SMEswhere not all workers can reduce working hours, from a current “average” of 38.1 a week to 37.5.
Body, which has avoided saying when the reduction in working hours could be a reality, has asked for a “balanced text” and aware “of the very important weight of SMEs and also the different casuistry of sectors and workers.” It has also been suggested that there is “support plans for companies” so that they can “digest” this change, for example, to help them “increase productivity” so that their workers can “reduce working hours.”
Soaring growth and contained inflation
At the beginning of the year, the Corps has transferred the good expectations about the behavior of the economyin 2024 and looking ahead to 2025, which is reflected in GDP growth and drop in inflation, which is already around 2%, the threshold established by the European Central Bank (ECB) and which has been reached from “prices above 10%” and “in some cases much above”, he said, in direct allusion to olive oil, whose price “is currently falling.”
“This favorable price development,” said Corps, has “two very positive consequences.” “It relieves the pocket because the shopping basket is more affordable” and “it is allowing the ECB to lower interest rates”, which benefits citizens with variable-rate mortgages.
Regarding economic growth and waiting for the data for the last quarter of 2024 to be confirmed – in which it will also be seen how the Valencia DANA affected the economy – the Minister of Economy has anticipated that last year closed with a increase of between 3.1 and 3.2 of GDPa figure that has been said to represent 40% of the growth in the entire eurozone – a meager 0.8% – and that will allow 2025 to start with 1.2%, which suggests that the forecasts of the Government that this year Spain will grow by 2.4% have been “prudent.”
Body has spoken of “a strong and robust growth” and also “sustainable, because it is balanced” and, although like the entire Government, I would like to see that in 2025 there are new General State Budgets, although he also recalled that the good economic data for 2024 has been achieved with the extended 2023 Accounts. “We are going to put a Budget project on the table and we are going to sweat it out,” he stated.
Energy tax still in the air
As he has said, the increase in collection – three tenths – to reduce the deficit is already implicit in the tax reform which was approved in November and of which It was pending to extend the tax on energy companies beyond 2024for which the Government approved a decree law last week to maintain it in 2025 and for which at the moment it does not have sufficient support in Congress, with Podemos and other left-wing groups pulling in favor and the PP, PNV or Junts, against.
In this context, Corps has pointed out that The Government “has fulfilled its commitment” to approve that decree, without going into whether it will be validated in Congress or if, if not, the Executive would try again in another way. “We are going to see if it is possible to reach an agreement with enough parliamentary groups,” he simply stated.
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