Sánchez prepares a large package of economic and fiscal measures

The coalition government is preparing an omnibus decree with powerful economic content with which it intends to begin its legislative production after the inauguration of Pedro Sánchez.

Oliver Thansan
Oliver Thansan
02 December 2023 Saturday 09:20
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Sánchez prepares a large package of economic and fiscal measures

The coalition government is preparing an omnibus decree with powerful economic content with which it intends to begin its legislative production after the inauguration of Pedro Sánchez. The regulation, which will be approved by the Council of Ministers before the end of the year, is being coordinated by the teams of Félix Bolaños in the Presidency and María Jesús Montero in the Treasury and Public Service.

All ministries are already making contributions and engaging in intense negotiations ahead of a vote in Congress that aspires to bring together the same majority that made Sánchez president and even put the PP in its first position.

The omnibus decree will contain a broad package of measures, with special attention to the economy. The main reason why the Executive decided to bring together a battery of new developments in this norm is the impossibility of being able to approve general State budgets that come into force on January 1.

Sánchez confirmed that the public accounts in force will be extended during the first weeks of January, so there are measures that must be approved or extended in a great decree that gives continuity to the previous regulations that were validated in Congress to face the consequences of the war in Ukraine.

The Treasury explains that one of the measures that the decree will include is the extension until June of the VAT reduction on food and the discounts on public transport, which are in force, with the addition of free provision for young people, the unemployed and pensioners. . The Government has not yet decided what to do with the tax aid for electricity now in force. If they are extended, they will be included in this rule. The increase in the salary of civil servants for next year, planned at a minimum of 2%, is also planned for this decree.

In Labor, for their part, they are trying to close the intense debate they are having with the Economy about the unemployment benefit reform, a commitment agreed with Brussels in exchange for receiving European funds. It must be approved before the end of the year. It is not the only measure that Yolanda Díaz's portfolio is negotiating.

The Ministry of Inclusion, Social Security and Migration is studying including the revaluation of the bulk of pensions with the CPI, pending the final data for November (the advance was 3.8%). The department headed by Elma Saiz also works on measures for the self-employed.

And Housing is studying the extension of the suspension of evictions for people in vulnerable situations, a measure that expires on December 31. If it were not extended, it would decline.

The Executive also highlights the importance of including the transposition of a European directive to modernize and simplify Public Administration that eliminates bureaucratic obstacles.

The Sánchez government already carried out a maneuver similar to this in 2018. In the last Council of Ministers of the year he approved an economic macro-decree that was later validated without problems in Congress. The PP and Ciudadanos abstained.

The decree would go to Congress throughout the month of January to submit it for validation. This is when parliamentary groups can request its processing as a bill and introduce amendments.

The validation of the decree, in any case, would be the first major agreement of the majority of the investiture in the legislature that is now starting. The first big vote that the new coalition Executive will face in a legislature whose great political challenge for Sánchez is, precisely, that the new mandate be sustained with stability. Then will come the litmus test of the new State budgets, which Sánchez hopes to approve during the first quarter of 2024.

All this, with a constant balance between interests that can be antagonistic, especially on the economic level, both within the new government coalition between the PSOE and Sumar – Nadia Calviño and Yolanda Díaz are already clashing over aid for the long-term unemployed – as within the parliamentary majority of the investiture.

And it won't be easy. Junts consider it “undemocratic” that the Government wants to approve all these initiatives in an omnibus decree, which will be voted on as a whole. For this reason, since the formation of Carles Puigdemont they have demanded that the content be negotiated “point by point”.

Above all on the economic level, it is difficult to reconcile the interests of formations with a more conservative profile, such as Junts and the PNV, with left-wing parties such as ERC, EH Bildu or the BNG. But Sánchez will have to try to align all of his allies, inside and outside the Government. Once the Council of Ministers approves the decree, it will have one month for Congress to ratify it.

To do so, it requires a simple majority, that is, more yeses than noes. And she doesn't have any votes left over.