Months earlier, political leadership shifted gears as polling slid, aiming to project that governance serves the people and the middle working class, a recurring refrain. The message frames policy as a defense of the common good against the influence of powerful economic interests and entrenched elites.
Through this narrative, proposals to impose taxes on large energy firms, major banks, and ultimately substantial wealth were framed as necessary steps. Leaders meeting at the political center suggested that vocal opposition from some business figures signals movement in the right direction.
On the day the Executive Board announced a new tax reform package targeting higher incomes and larger corporations, the head of the Spanish Employers’ Confederation, Antonio Garamendi, criticized the government’s pivot and warned about potential effects on international investor confidence in the country.
The government is accused of punishing business and facing criticism from its leadership, while at a congress convened by the Confederation of Executives and Managers in Bilbao, Garamendi contended that the true problem lies not with businesspeople but with the alignment of policy with solutions that empower enterprise.
Fiscal policy ‘error’
Garamendi called the new tax package a genuine misstep, arguing that changing rules every few days discourages investment and undermines long-term planning. In the midst of a regional race that has seen tax-cutting competition among authorities led by both major parties, business leaders pressed the government and other public authorities to join the tax-cutting trend, aiming to ease burdens on firms and citizens alike.
The president of the employers’ group highlighted the ongoing competition over tax cuts between autonomous regions and the measures proposed by the central government. Ahead of the 2023 political cycle, he framed the debate as an election-driven spectacle, noting ongoing daily announcements while preparing for the group’s upcoming leadership election in November.
Garamendi supported tax reductions and linked them to diminishing the shadow economy. He urged that money should flow into citizens’ pockets, arguing for tax cuts. He noted that Spain operates with a relatively large underground economy and urged broadening tax bases while lowering rates to boost activity and formalize more economic activity.
The CEOE leader also criticized the government’s emphasis on revenue collection rather than administrative efficiency. He argued that public administration should focus on streamlined, effective governance, not just fiscal capture. He asserted that cuts should not target essential services; rather, overlaps between administrations should be addressed to improve overall efficiency, urging a more integrated approach to governance.
In parallel, Garamendi challenged the government’s plan to adjust the Wealth Tax to cushion the immediate impact of regional tax cuts and decried any move toward fiscal centralization. He stressed that while regions have limited capacity within the broader budget, a push toward centralized control would curtail the diversity Spain has historically practiced. The stance was clear: this is not harmonization but centralization, and it deserves careful consideration within the federation of autonomous communities. [Citation: Government briefing and industry statements].