"We are not facing a hurricane, but rather a national economic emergency." Josep Sánchez Llibre, president of the Catalan employers Foment del Treball, yesterday drew an almost apocalyptic scenario for the economy and asked the Government for real solutions, at the height of the current moment and far from half measures or complacency. The inflation figure for June – 10.2% year-on-year with inflation and with the core rate at 5.5% –, the imminent rate hike and the deterioration in the climate of business and consumer confidence call for a forceful performance.
"The Spanish economy needs a leadership that should correspond to the President of the Government to achieve a pact of solidarity and responsibility between unions and employers to distribute the cost of the crisis among all of society," said the businessman at the Forum Europe held in Barcelona. The pact, he added, should also count on the collaboration of civil servants and pensioners. But it won't be easy. The Independent Trade Union and Civil Servants Center (CSIF), the majority representative among public workers, demanded on Wednesday that the Government "enable a credit to compensate for the rise in the CPI in public wages", along with the recovery of the purchasing power lost in the last 12 years. Pensioners, for their part, will see their pensions revalued this year in accordance with the average inflation from November to November, as stated in the State budgets. The income agreement would therefore force important concessions in these two groups regarding their aspirations or what they have already agreed upon.
Sánchez Llibre insisted in his speech that "it is necessary to have this deep and broad pact because, if it is not carried out, the consequences for employers and workers could be alarming and critical." The President of Foment considers that it is essential to combine the objective of preserving companies and jobs with coexistence and social cohesion. Due to the ambition of the effort and its political implications – in 2023 there are local, regional and general elections – it will be impossible without the President of the Government, who must “lead this situation”.
Although yesterday he did not offer the specific data, the president of the employers' association assured that the majority of the business fabric is working at a loss because they have not transferred their cost increases to the prices paid by the consumer. "Companies, SMEs, can work for a few months at a loss and we already consider 2022 as a lost year in operating accounts, but we appeal to the Government's responsibility."
In his review of the situation, Sánchez Llibre lamented that "the great forgotten in all the measures adopted by the Government [beyond the ERTE and the loans guaranteed by the ICO, surely] have been the companies". "This has not happened in other countries of the European Union, such as France, Germany, Portugal and Italy," he added.
Now, inflation is already causing a brake on consumption and investment because all economic agents suffer from the increase in prices and financing. Although the first rise in official interest rates will take place on July 21, loans and debt have already been getting more expensive for weeks.
Public accounts, as soon as tax collection begins to suffer, will also suffer. Some of the measures approved by the Government – such as those relating to electricity companies and others that are announced or under study – involve raising the tax burden on companies. In this sense, Sánchez Llibre defended that "the increase in taxes is not the solution", as Europe is teaching. "In Spain there are wrong approaches to raising taxes, and what we need is competitive taxation." The alternative, he concluded, is to fight against the submerged economy, which affects 25% of activity and if it drops to 15%, it would mean raising revenue by some 35,000 million in four years.
Finally, he asked that the situation of "mistreatment" by the Government in the investment and execution of infrastructures in Catalonia be reversed, insisted on the need to expand the El Prat airport and opted for dialogue and for continuing to work to propose the return of the companies that moved their headquarters abroad due to the independence process.
