27 billion of the imposing figure of 72,000 million euros that the Government of Pedro Sánchez plans to inject into the economy, to boost recovery after the pandemic and job creation are stuck in the same box as the General State Budgets (PGE). They represent 40% of the total that the bicolor Executive has projected to spend on its Recovery Plan until 2023 and Moncloa wants include them in the 2021 accounts, in order to attract the rest of the parliamentary forces to its territory. Even the PP.
This movement, through which it wants to start spending European funds without having to wait for the arrival of money from the European Union (EU), seeks to "accelerate the execution of the plan from the moment the Budgets are approved," according to Sánchez . A statement of intent with which casts a hook to catch the necessary support in Congress in order to carry out their numbers, which must be approved with an absolute majority of 176 seats.
Apparently little has changed in the arithmetic of the lower house to suggest that Sánchez will overcome the obstacles to his budget project next year. At this time, PSOE and United We can gather the support of their partners, including Citizens, while the popular Pablo Casado are still closed in band to negotiate the accounts, so the key to the Budget that is intended to replace the of the former Minister of Finance, Cristóbal Montoro, extended from 2018, continues in the hands of the independentistas. But the storm that is raging strongly in ERC and the post-convergent space, added to the disqualification of former Catalan president, Quim Torra, and the elections in February, has caused an earthquake in the sovereignist parties such that the Republicans could end up supporting Sánchez.
Socialists, podemitas and republicans measure the impact of repeating their alliance, which will obviously also have the approval of the party of Inés Arrimadas, who has already opened up to support the PGE. The process opened after Torra's departure has allowed us to gain time and Republicans are studying what repercussions it will have on the electoral process that opens five months from now, closing ranks now with the Executive. The dialogue table, postponed until the Catalan Government comes out of its interim and the announcement of a second expansion of the Catalan Budgets, which will include an increase of 200 million euros for health and 20 million for universities, in addition to the 6 Millions in culture already announced, mark the path for Oriol Junqueras' party to end up being the crutch of the PSOE and United We Can.
For now, the Government has taken the first step in the PGE process by raising on Monday the non-financial spending limit, known as the 'spending ceiling', of the State Budget for 2021, which increases by 53.7%, to 196,097 million euros, including extraordinary transfers to the autonomous communities and Social Security and part of the European funds. Now, the Minister of Finance, María Jesús Montero, must appear before the deputies to get it approved, to which the PP demands from Sánchez a "budget rebalancing plan" to support the spending 'free bar'. If this process is not passed, Moncloa should start over.
The presentation of the Recovery Plan, which must be sent to Brussels before October 15, has also occurred one day after the Council of Ministers approved the new macroeconomic picture, which contemplates a fall in GDP of 11.2% this year and an advance of 7.2% in 2021, but which will reach 9.8% thanks to the impact of the Recovery Plan.
In addition, the Executive has set a deficit forecast of 11.3% of GDP this year and a public debt of 118% of GDP, has established a deficit reference rate of 7.7% in 2021.
SPAIN HAS TO DO ITS DUTIES
Thus, the international analysis houses underline in their reports the worrying situation in Spain. In this sense, Rabobank believes that "it may take years to recover its pre-crisis levels", since it foresees that GDP will only rebound by 5.3% in 2021 – compared to the 7.2% expected by the Government. Regarding employment, it places the unemployment rate at 20% in 2021, compared to the recovery to 16.9% managed by Sánchez, who expects the creation of 800,000 jobs between 2021 and 2023, thanks to its refloat plan and the reincorporation of the 700,000 workers who are still in ERTE.
'Bloomberg', for its part, emphasizes that "Spain's growing list of risks is starting to make investors nervous". The Spanish debt is disputed with the Italian one for the dubious honor of being "the pariah of Europe" and having the highest yielding bonds. "The margin between the profitability of the Spanish and Italian debt is the smallest in the last two years," the news agency warns.
With this outlook, it is not surprising that Sánchez urges Congress to “accelerate the calendar” of economic recovery, since the more than 27,000 million euros to be used in 2021 will allow “accelerate the execution of the Plan from the moment the Budgets are approved and beyond the times that the Commission manages for payments ”.
For this reason, the President of the Executive stated on Tuesday that "Spain urgently needs new Budgets" and that these “are not just any Budgets; they are the budgets that a country demands that must recover from a great blow and win its future ”.
In this sense, he stressed that it is a PGE "of progress because all the great transformations that place us have a progressive bias: digital transformation, energy transition, social and territorial cohesion, gender equality", and, therefore on the other hand, some PGE "of the country because its urgency transcends the boundaries of the parties and demands unity in the effort of recovery and transformation."