Whichever way you look at it, the Government of Sanchez has once again emerged victorious by managing to approve a tax reform to comply with Brussels while securing the appointment of Teresa Ribera as number two of the European Commission. The extension of the tax on banks and energy companies goes ahead, in addition to the increase in the minimum corporate rate or the restoration of the reform Montorobut tax increases on SOCIMIs, tourist apartments, diesel or health insurance remain on the way, which would have complicated the survival of many sectors.
The vote in the Finance Commission on Monday, which lasted until two in the morning, revealed the chaotic negotiation of the first vice president, Maria Jesus Monterowith contradictory agreements between its partners. Thus, while he promised Junts and PNV to eliminate the tax on energy companies, he guaranteed BNG or Bildu, like Podemos, that he would continue, but with an exemption for sustainable investments. The Government will create a parliamentary commission to specify the regulations. But there is no guarantee what will come out of it. The moral winners are the PSOE and its partner ERC, both in favor of extending the tax for at least one year, as the sector fears will happen.
Energy companies are against introducing a tax deduction, because it would create great discretion when applying it, which could benefit autonomies like Catalonia, to the detriment of others like Andalusia, or some companies over others, depending on their official relationship. . The Energy Club, Enerclub, which brings together the entire sector, warned that 30,000 million are at stake in the next three years, equivalent to 6% of the annual investment in Spain. In addition, it would destroy the ambitious Energy and Climate plan presented by the Government for decarbonization.
The tax that attracted the most consensus was on banks. Junts once again took the lead, with a toughening of the tax on entities with interest and commission margins exceeding 5,000 million. A suit made to measure for Sabadell, which is just below that income level, and for the medium-sized bank. Junts also agreed to distribute the revenue based on the GDP of the autonomies, which guarantees that Catalonia will receive one fifth.
However, CaixaBank, the largest banking group in Spain, will be the most affected. The bank chaired by Isidro Faine He put an amendment on the table, which exempted the La Caixa Foundation from paying the tax. But those of Puigdemont They replied that they could not take on his defense, so he disappeared from the final vote. The CEO of CaixaBank, Gonzalo Gortázarestimated before learning about the toughening of the tax, that this could reduce its profitability by one point over the next three years, now it would be more.
The banking associations, AEB and CECA, warn of a decrease in the granting of credits. The Government once again falls into an irreversible contradiction. While he criticizes the BBVA takeover because it would narrow financing for SMEs, he later favors it.
The Government has transformed Congress into an auction, in which any type of initiative is negotiated, without knowing its economic cost or listening to the affected sectors in a hearing and, of course, without testing the legality of the measures with institutions such as the Council of State.
PSOE and ERC win the energy battle against Junts. The next battle is the time cut
The lack of legal security is brutal. The regulatory environment changes overnight for entire sectors of the economy. The real estate company assures that the damage has already been done, because the approach of eliminating the tax exemption for SOCIMIs generated great distrust among national and foreign investors, at a critical moment, since the Bank of Spain evaluates the housing deficit at 600,000.
Montero will fulfill his promise to adjust public spending by 4,000 million in 2025. But at the cost of increasing the tax pressure on companies and families and undermining confidence in our country, instead of adjusting spending or taking advantage of the good years to undertake tax reforms that boost growth. According to the forecasts sent to Brussels, the GDP will have a flat behavior from 2027.
The tax competitiveness index of the Tax Foundation, presented in Spain by the Institute of Economic Studies (IEE), reveals that the tax pressure is already above the European one, both in companies and in personal income tax or capital income. Tax collection grew a surprising 47% from 2019 to the present, up to 295 billion. But the Government did not know how to take advantage of the opportunity to reduce fiscal imbalances. The deficit rose in that period from 3.1 to 3.6% and the debt went from 98.2 to 107.7% of GDP.
The Tax Foundation points out that there is no room for more taxes in Spain without a serious deterioration in its competitiveness. Both the average tax burden and that exerted in the business sector grew by around two points between 2018 and 2023. Spanish companies contribute 32% of tax revenue, eight points more than the EU average. While the Corporate Tax is 25%, compared to 21.3% in Europe.
Being rich in Spain has a serious penaltyas is known. Not only because we are one of the few countries with a Wealth Tax, but because the personal income tax, which has not taken into account the rise in prices in the last two terms, can reach 54%, compared to 40% in the EU. The situation is repeated in dividend taxation, with a maximum of 46%, compared to 41% in Europe.
Sánchez’s other victory is called Teresa Ribera. The still third vice president and Minister of Ecological Transition blatantly lied both on the platform of the European Parliament and of Congress by stating that the Tajo Hydrographic Confederation (CHJ) sent the emails warning about the flooding of the Barranco del Poyo “on time.” The email from the CHJ warning of the overflow was received at 6:43 p.m. at Cecopi, when many residents of Paiporta were already struggling to survive in their garages or on their way back to their home.
Sánchez wins againas the latest CIS survey shows, despite his painful intervention in DANA or the alleged corruption of his Government due to the case Aldama. It is the last pirouette of a president with the seven lives of a feline, who always lands on his feet. Of course, no one gives explanations about the cost of the measures for the economy.
On the contrary, Montero boasts that his next objective is the 2025 Budget, although first he will have to deal with the demands left and right of his partners. Before that, the next blow to businessmen is the approval of the reduction of the weekly working day to 37.5 hours that the vice president Yolanda Diaz is preparing to sign with the unions next week. The opposition of Junts is key for it not to prosper, but given what happened with the fiscal measures, anything can happen.
Desperation at BBVA. Torres calls on employers and Chambers to avoid supporting Sabadell
P.S..- In bad weather, good face. It is the motto adopted by BBVA, after the strong loss of credibility of its president, Carlos Torresafter the CNMC warned that the takeover bid for Sabadell would lead to a serious credit restriction for SMEs.
The blue bank not only downplays the importance of the Competition report, but also gives rise to a possible increase of 2,000 million in the offer suggested by Deutsche Bank, despite the fact that its CEO, Onur Gençstated that “we will not hesitate for a minute to withdraw if value is compromised.” After having fallen almost 20% since the takeover bid, how much would BBVA lose on the stock market if it offered 2,000 million more?
The problem is that large employers’ associations such as Foment and numerous Chambers of Commerce will appear before the organization to object to the operation. Torres, with water up to his neck, is calling the presidents of these institutions to personally convince them that the takeover bid will not mean a decrease in credit to SMEs. It has a complicated task ahead of it, because not only the chambers or the employers’ associations, but also the two large unions, CCOO and UGT, intend to position themselves against the operation due to the significant reduction in employment in Catalonia and Valencia. A strategic mistake that is difficult to correct!
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