Congress is approaching another agonizing vote, with last-minute negotiations and all waiting for just a few votes. After reaching a last minute agreement with ERC, EH Bildu and the BNG, the PSOE is concentrating all its efforts to convince Podemos to support the tax package which will be used to guide the negotiation of budgets. Ione Belarra’s party is threatening to overthrow him if it does not have a guarantee that, at the same time, the government obtains support to increase the tax on electricity companies.
In the last hours, negotiators from the socialist part of the Executive have accelerated meetings and contacts with Podemos. The Minister of Justice, Félix Bolaños, held at least three meetings in the last 24 hours with the formation, some in the presence of the first vice president, María Jesús Montero. But the negotiations are complicated and, as of Wednesday afternoon, they were still blocked.
The problem at this point is that the government has a very weak balance to reconcile all the support from the inaugural bloc. And any party that moves in one direction or another can overturn the agreements reached on Monday at the Finance Commission with Junts and PNV, on the one hand, and ERC, EH Bildu and BNG, on the other. This architecture leaves very little room for the PSOE to propose changes to Podemos in the tax package voted on this Thursday.
Last Monday, during a negotiation that lasted hours, the PSOE managed to advance the opinion of the bill aimed at imposing a minimum rate of 15% on multinationals, in order to prevent them from transferring their tax headquarters to other countries. the European Union to pay less taxes. This text, which is in fact the transposition of a European directive, is the basis on which the government used a series of amendments with the aim of approving a broader fiscal package which also serves to lay the foundation stone of the budgets generals. of the state.
To obtain support for the text last Monday at the Finance Commission – a step prior to its final approval – the Government committed to its independence partners to execute in parallel a royal decree which it will approve later and which includes its main red line , a permanent special tax on energy companies.
Thanks to this commitment, the PSOE managed to bring together the partners on Monday evening to facilitate the reform, but the agreement contained details that the Treasury later revealed in a statement. “The government wishes to clarify that it maintains its agreement with Junts not to tax energy companies that maintain their commitment to effective investment in favor of decarbonization,” we read in the note. Without this fine print, the government risks losing Junts’ support for the Commission’s opinion and the entire text at Thursday’s plenary session.
The government has limited room for maneuver to convince Podemos, which will only vote on the text if it obtains proof that the royal decree of electricity companies will be implemented. For this, he needs to know the position of Carles Puigdemont’s party, which threatens to overthrow him. Without assurance that the royal decree will be issued in the future, the Ione Belarra party does not guarantee its votes for Thursday’s tax package. And the Government needs, at least, the abstention of its four deputies.
Late this Tuesday, the socialist part of the Executive recognized that the meetings held throughout the day with the leadership of Podemos had not served for the moment to guarantee the four votes in favor of Ione Belarra. These same sources assumed that the approval of the purples, if it happened, would not be finalized until late Thursday and a few hours before the final decision. Although they refused to assume that a left-wing party could even seriously consider overturning the tax package that depends on these votes.
“This is a profoundly progressive reform. There are taxes on banks, on multinationals, on the highest capital income… It would be very difficult to explain that a left party like Podemos would destroy all this simply because there is no has no other tax, that on energy companies, in terms that they “would like”, say sources close to María Jesús Montero, who underline the importance of the vote from a political point of view for the stability of the legislature.
Sources close to these conversations with Podemos admit that in the last hours some political counterparts have been brought to the negotiating table who convinced Ione Belarra and who would not be directly linked to the tax measures under discussion. Among other things, Treasury sources point out, because there is no more room to modify anything agreed with the rest of the groups and because he managed to hold out until the key vote as a house of cards.
Regarding the decree initiated by ERC, Bildu and BNG to develop a new tax on energy companies, the Treasury recognizes that it is a text on which they are already working to find the magic formula that will satisfy everyone: from Junts, who wants the tax rate disappears, up to Podemos, which aspires to maintain it at the same level as until now. However, Montero’s ministry rejects the fact that the content of this project has yet been negotiated with any group and denies that a decision has been made on the percentage by which electricity companies will be able to receive a tax bonus based on their commitment to promoting clean energy.
An impact of “5 billion” due to Montoro’s “failed reform”
A defeat of the Government this Thursday will not only have political consequences. María Jesús Montero warned the PP on Wednesday that its rejection of the tax package means, for example, preventing the resolution of the problems generated by the “failure of tax reform” of Montoro (the Minister of Finance of the executive of Mariano Rajoy) . A problem which “because of the penalties [de los tribunales] “I would give 5 billion euros this year to big companies.”
To avoid this impact, the agreement that the PSOE and Sumar signed on Monday last week included the proposal to “advance the collection of large companies and business groups by limiting their possibilities of deducting losses and repatriated dividends , or the possibilities of consolidating “businesses”. groups in corporate tax matters”. The plenary session of Congress could approve this Thursday the amendment which includes this point.
1,500 million from the bank
Other figures that MEPs have on the table are the almost 1.5 billion euros that the temporary tax on financial entities has collected due to the sector’s record profits, both in 2022 and 2023, thanks to increases in the European Union’s benchmark interest rates. Central Bank (ECB). In 2024, despite declines in the official “price” of money in the Eurozone since mid-year, interest rates will on average be at or very close to the 2023 average level, sustaining another year extraordinary for the banks, while many families were drowned by their variable interest rate mortgages.
Another 1,000 million from energy companies
Energy companies have also made and are making historic gains. The large groups in both sectors are monopolistic and use their dominant position to improve the margins of their companies, as we have seen with this inflationary crisis. In addition, oil, electric and gas companies have captured in their profits much of the government aid intended to mitigate the damage caused by rising prices to families and other businesses and self-employed workers, such as reductions in consumption taxes (VAT and special taxes). taxes) and reductions per liter of gasoline.
The fight for the extension of the temporary tax on energy companies, which brought in around $1 billion in 2023, and almost the same amount in 2022, has been transferred to a new royal decree-law. The PNV and Junts have aligned themselves for weeks with the interests of Repsol, Iberdrola, Cepsa, Endesa or Naturgy and blocked this commitment of the PSOE and Sumar for the formation of the coalition government.
7.2 billion from the Recovery Plan
These days, Montero also deplored that the possibility of fighting “hydrocarbon fraud” is under threat. He also warned that “the equalization of diesel and gasoline prices” is at stake to continue “promoting the fight against climate change, responsible for DANA” from which Spain has suffered. Or even, support for “healthy lifestyle habits”, in reference to the amendment which provides for an increase in taxes on tobacco and vaping devices.
But there is an even more tangible threat. If the transposition of the European directive providing for a floor rate of 15% for corporate tax for multinationals is not carried out, Spain will find itself without the fifth disbursement of 7.2 billion of the recovery plan. And, ultimately, this will compromise the General State Budgets (PGE) which should be used to respect the commitment made by the EU to limit the growth of public spending and reduce the budget deficit.
An objective marked by the return of community tax rules and which, according to the vice-president and all the experts, needs more income to avoid becoming a new exercise in austerity, with the consequences that this has on employment. and economic growth. .
