This call for early general election It has particularly important economic consequences. arrangement plan. On the one hand, there is recently decided legislative projects paralyzed. This is the case of establishing the Independent Authority of the Financial Client, which is being processed by the Senate. The agreement reached in Congress to create an institution that actively monitors the rights and relationships between financial institutions and customers may not be a reality for now. Another example is the inclusion of changes in the pension reform bill; this is vital as the Government has passed the decree law with important issues to be discussed.
Also in the Senate regulation against food wastewhile new civil service law it was still in a less developed state until it awaited a report in commission. The government, unwittingly, complied with the request of the higher bodies of the State Administration to paralyze anything that could be paralyzed. significant change in access public functioncompletely replacing both entrance examinations and promotion and promotion regimes.
housing law
Another paralyzed law sustainable mobility, also on commission. A comprehensive reform in the transport sector that will have to wait a few more months, creating an opportunity to change important aspects such as the competitive disadvantage between road passenger transport and rail service.
But even some approved laws are paralyzed in their practical application as the paradigm of this situation. the housing law. Completely altering the regional and municipal political panorama deals an almost certain blow to the Government coalition’s implementation of this stellar law, as it makes it difficult to declare stressed areas, tenants’ scales of vulnerability, and other elements with territorial competence. local.
unsuitable conditions
Leaving the polls on July 23, the Executive will have to deal with other issues of paramount importance. Elections will be held in one day. very important dates in the traditional calendar of economic policy, because when you start preparing General budgets of the state the following year with the approval of the non-financial expense ceiling.
In this sense, the first and most likely thing is that there will not be a new Budget in 2024, at least until the middle of the year, as the deadlines lead to the formation of legislative chambers, full mandate and formation of the Government. It will not be possible to meet the mandatory deadlines for accounts that belong to August and therefore should enter into force on 1 January of the following year.
But beyond this no small matter, the coalition government leaves future Executives with different challenges that they will have to face both in the short and medium term. It’s about handling end of a long period of monetary stimulus This has granted more resources to public administrations in the last three years than in their entire history, allowing money to circulate massively and breaking the half-billion-euro barrier budgeted in the case of Spain.
Manage funds well
The first of the difficulties is precisely the concretization in terms of the real economy of the last period. the already famous big wave of European financing NextGenEU funds. In this sense, the acceleration and implementation of European funds is essential after almost two years of deployment, with major administrative challenges, an unclear regulatory framework, and the overall discouragement of the business class over the effectiveness of the funds.
According to the last report of the Recovery Plan portal, published at the end of March, the real money reaching companies and individuals from the central government barely amounts to 9,111 million euros, and there is little or no information about the 4,200 million that were called up. autonomy. This de facto execution is also complex to follow, as expressed in the European Parliament Control Commission report. The terminological confusion, the difficulty of scrutinizing the amount and purpose of calls, and the disintegration of subsidy-seeking institutions means: funding becomes more difficult to implement.
At this point, following the draft submitted by the Government in December and taking into account the technical and administrative difficulties of the non-refundable money (69,000 million to be distributed and used by 2026), new Admin will have to request European Commission Repayable financing tranche of 84,000 million euros. With an extraordinarily generous repayment term and a practically reference financial cost, both the format (loans) and potential call agencies (which are greatly reduced as not all public administrations can call) and potential allies (mainly the banking system and similar organizations) ICO, CESCE, COFIDES, among others) can ensure that funds reach productive sectors fairly quickly and effectively.
settings are back
Second the new government will once again have a real budget constraintIt is not official to date as in 2024 the eurozone will realign itself to the Stability and Growth Pact, starting with a deficit of 4.8% and theoretically reducing it to 3%.
Probably in 2023 the inflation will leave a large new dividend for public accounts in the collection of figures such as personal income tax, social contributions and corporate tax (until March, the state collection homogeneously increases by 4%, primarily thanks to the withholding of personal income tax). But if inflation forecasts for 2024 are met, or if the PP forms a Government in the face of possible rate deflation and communities continue to do so with autonomous division, revenue will stop helping and reduction will need to be emphasized. public spending.
Exactly in this key, the third challenge, withdrawal of all incentives and help against inflationWith the increase in defaults due to the end of the pandemic’s ICO guarantees, which has become a budget expense.
rising inflation
Reversal of measures such as professional fuel bonus, taxes on electricity and gas bills, extension of employment subsidies, public transport subsidies or VAT on food, among others, the Bank of Spain said. It will mean an extra 1.5 points increase in CPI in 2024. According to the Institution’s inflation forecast for the next year (3.6%), the end of these measures will bring inflation to 5.1% and keep inflation at high levels for a longer period of time.
Finally, in terms of sectoral policies and in many ways, the new Government is a first magnitude problem with energetic politics. Assuming the next legislature is complete, in its final months (mid 2027) the first nuclear dismantling in Spain will begin with the Almaraz plant. However, at the same time, it will have to have firmly decided both on the radioactive waste management model and the revision of the implementation criteria of the European Biodiversity Strategy, which are starting to affect the installed hydroelectric power.
Early election call It could bring significant changes in Spain’s position for the reform of energy markets.Strengthening positions for accelerated development of hydraulic storage, investments in distribution and transport networks, or the need to have a more efficient market to promote long-term contracts.