Despite objective hurdles like governing with a coalition that lacks a legislative majority, the third general government budget is moving forward. After a lengthy stretch during which public accounts required repeated extensions due to stalled consensus, the multi-party system is starting to function more effectively. Next year is expected to see a substantial rise in social spending. Pensions will be adjusted to the consumer price index, a forward-looking reserve fund will be replenished, and investments will support health, education, addiction programs, youth initiatives including scholarships, and targeted aid for the most vulnerable. Inflation remains a strong force, and the overall projected deficit sits around 3.9%, brushing against the theoretical limits of a European convergence that seems poised to resume. This overview reflects a budget aimed at social protection while minding fiscal discipline. — Government Analysis, 2024
A few days earlier, the government presented a financial package to raise support for the lowest incomes without altering the personal income tax structure. It also increased taxes on certain capital incomes, temporarily raised the tax on earnings to meet the European minimum of 15%, and introduced a temporary Solidarity Tax on large fortunes that affects estates above a three-figure million threshold, reduced by the value of the main home. These measures are projected to generate just over 3 billion euros in additional Treasury revenue. — Fiscal Council Review, 2024
The measures also served to curb what some called an irrational race to the bottom among autonomous communities, a trend driven by reckless actions from regional leaders. Yet these steps did not fully align with the economic policy priorities highlighted by the first vice-president, and the coalition consensus was sought to reflect a unified approach. The agreement thus represents joint responsibility and a balanced differentiation that respects the positions of all parties involved. — Political Journal, 2024
The pact was signed late at night, just before the cabinet prepared to send the bill to the Cortes. The agreement gave visibility to the coalition’s commitment to social policy and set the stage for revisions to several controversial areas: housing legislation, family law, and citizen security law, commonly referred to as the spigot law. It also triggers adjustments to the Public Income Indicator for Multiple Impacts (IPREM), the index used to calculate social benefits, non-contributory pensions, and the Minimum Income. It was noted that unemployment benefits after six months would be calculated at 60% of the salary base. Advancing the Family Act, carers’ leave, a contingency leave for unforeseen family events, and a new eight-week parental leave are all on the table. The coalition agreed to strengthen protections for single-mother families with children, placing them on par with large families, while deciding not to extend maternity and paternity leave at this stage. — Policy Brief, 2024
Many observers see the PSOE-UP alliance as a demonstration of virtuous complementarity. In this view, the PSOE embodies progressive and prudent social democracy, while UP pushes for tougher, more decisive measures to reduce social inequality. The European Union rules around stabilization aspects are acknowledged, though not yet fully in force, and the two parties strive to reconcile steady, orthodox fiscal commitments with the radical energy of a left that pushes for concrete, immediate solutions. In practice, the left’s influence across Europe is expected to drive balanced, realistic policy while tackling visible social problems that should not be postponed. In short, the collaboration between PSOE and UP has shown effective role distribution, and their leaders must maintain this dynamic if they want to stay in power. — European Affairs Desk, 2024