The PP announces that it will overthrow the deficit objectives in the Senate

The PP will use its absolute majority in the Senate to overthrow the deficit and debt objectives and the spending ceiling for 2024 this Wednesday, which will force the Government to have to develop a new path and return it to the Upper House within the deadline of one month. The general secretary of the Popular Party, Cuca Gamarra, confirmed this Monday in an interview on RNE the vote against the PP to “not endorse the Government's economic policy”, despite the fact that this decision also affects the 12 autonomous communities governed by the PP, since they will have less fiscal margin. The popular movement in turn delays the approval of the General State Budgets (PGE), since the spending ceiling is crucial for the design of public accounts.

The approval of the deficit and debt objectives and the spending ceiling is one of the relevant functions of the Senate, because if the vote does not go ahead in the Upper House, these decline and the Government is obliged to re-draw a new path and present it. within one month. Therefore, the General Budgets are also delayed for at least one more month. Of course, the PSOE had the intention of delaying the Public Accounts negotiations after Vox overturned the amnesty law in Congress last week. The socialists focus on closing that obstacle first and then addressing the issue of the PGE. But the path is even more tortuous now after the PP announced that it will vote against the spending path.

Gamarra has advanced in RNE the reasons why his party will not support the objectives of budgetary stability and public debt for all Public Administrations for the period 2024-2026, and the limit of non-financial spending of the State budget for 2024, which are voted on this Wednesday in the Senate plenary session, after having been approved by Congress. “We do not support these deficit objectives,” he explained on RNE. “Firstly, because it has not responded to the needs that the autonomous communities have put on the table. And because we must not forget that it is necessary to respect the communities' fiscal autonomy. There are taxes that the autonomous communities are eliminating in search of economic reactivation, where, unilaterally, what the State is trying to do is recover them on the other hand, preventing fiscal autonomy,” he has argued.

In a subsequent press conference, at the party headquarters, the popular party imposed their conditions to negotiate a new spending ceiling after the plenary session this Wednesday. But the requirements demanded distance the possibility of forging an agreement, not only because of the high degree of confrontation between the PSOE and the PP, but also because the economic conditions requested by the national leadership have already been rejected by the Government previously – such as the deflation of personal income tax for incomes of less than 40,000 euros or the reduction of VAT on meat and fish. Therefore, understanding is expected to be impossible. “For other things we have seen plenary sessions stop so that they can reach an agreement,” said Juan Bravo, deputy secretary of Economy of the PP, in reference to the conversations between the socialists and Junts for the validation of the anti-crisis decrees.

Other conditions requested by the PP are the reduction of VAT on electricity and gas; the elimination of the tax on energy companies; a greater degree of “co-responsibility” in the distribution of the deficit between the Government and communities, and the provision of an extra fund for the services provided by the territories. At the beginning of January, before the plenary session in which the three anti-crisis decrees were debated, the Executive already refused to alleviate the fiscal pressure that the popular people demanded. Government sources calculated that it would mean losing some 9,000 million euros less to public coffers, an “unaffordable” cost, they alleged at the time.

In the event that the PP were to overturn the path for the second time in the Senate, uncertain terrain would open up. According to the Government, what would happen is that the deficit objectives of the Stability Plan submitted in April to the European Commission would be applied, which are more demanding than those planned for 2024 – path of 0% instead of the 0.1% proposed – . This would force the autonomous communities of the PP to tighten their belts. Last December, the first vice president and Minister of Finance, María Jesús Montero, already warned the PP that if it brought down this deficit path it would return to those approved in the Stability Program last April, which are harsher and demanding. “The PP would be throwing stones at its own roof,” Montero warned. However, the popular ones have prioritized a national policy decision, seeking to put new obstacles to the Government of Pedro Sánchez.

The problem that arises from now on is that some PP communities have already approved their respective budgets according to the 0.1% spending path. From the popular leadership they do not consider that there are problems in that sense because their accounts balance and they accuse La Moncloa of not “having done their homework on time.” They also ensure that there is unity among the territories to vote against the deficit objectives in the Senate. “This is not a political decision. “Don't try to say that it harms the autonomous communities and the city councils, don't try to confront them,” Bravo said to the Government, at a press conference, in which he appeared alongside the spokesperson for the PP in the Senate, Alicia García. “We hope that the Government listens to the Popular Party's proposals to reverse the damage. I am very afraid that he will not do it because Sánchez is tied hand and foot,” the senator added.

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