Good morning!
How is the week going? We are devastated by the horror of the loss of life and material destruction experienced in Valencia due to the worst DANA of the century. It affected other provinces like Albacete or Málaga, but nothing compared to the virulence of Valencia. In these situations, you realize the importance of public services. You understand why the Military Emergency Unit (UME), which the right ridiculed when it was created, is necessary, and you do not understand the reasons why the president of the Valencian Generalitat, Carlos Mazón (PP), has eliminated the Valencian Emergency Unit. You understand the value of public health, firefighters, civil servants trying to save lives and improve the situation in devastated areas.
Now I’m going to clarify one question because it seems that the right doesn’t quite understand: public services are paid for with taxes. Yes, as you may have heard before, “taxes are the price we pay for civilization.” They are necessary to avoid transforming society into a jungle in which only the strongest survive, in this case the richest. It is therefore necessary for the government to maintain the special tax on banks and energy companies.
This is going to be difficult because the PSOE seems to have given up. The socialists reached an agreement with Junts and the PNV to perpetuate the special tax on banks, while canceling the tax on electricity companies. This pact does not have the support of Sumar, who filed his own amendments in Congress to try to also include energy companies in the parliamentary process. It should be noted that companies like Repsol, Iberdrola, Endesa, Banco Santander, BBVA or Caixabank have achieved high profits since the approval of the special tax without this new tax figure having caused a loss in their accounts .
But for several weeks, the leaders of energy companies and banks have launched a campaign of defamation, threats and pressure against the coalition government in an attempt to cancel the tax. If they succeed, Spain will take the opposite path to that proposed by international organizations. The International Monetary Fund (IMF) supports “structural tax reforms” that raise taxes on the richest and remove subsidies for businesses. On the other hand, finance ministers and central bank governors who participated in the last G20 meeting stressed that more progressive taxation “is one of the key tools to reduce inequalities”. […]strengthen the viability of public accounts and promote sustainable, balanced and inclusive growth.
However, Spain appears to be moving in the opposite direction. The First Vice President and Minister of Finance, María Jesús Montero, has already announced that the special tax is in preparation. Both the PNV and Junts aligned with Repsol’s interests to end the imposition of taxes.
Furthermore, we must not forget that the European Commission took Spain before the Court of Justice of the EU last October for not having notified the transposition of the directive imposing a minimum tax rate of 15% on companies to large multinationals. The government approved this measure in June, after receiving a warning from Brussels, and the project is currently being processed by parliament. Be careful, the same thing may happen with the tax on banks and energy companies and an absolutely caffeine-free approach will emerge.
The government’s parliamentary weakness pushes the nationalist right to dictate the budgetary policy of the central executive. If they manage to cancel the tax, the ibex wins, but you lose. If the tax is removed, these multinationals will win and public services will lose.
Entrepreneurs
It’s not just a business issue, the richest are continually looking for ways to pay less and less tax. Previously, SICAVs were the preferred investment vehicles for wealthy citizens, but increased demands to benefit from the low tax of a large asset tool that the coalition government launched have caused this activity to be minimized. and the exit of two out of three clients. Today, money never sleeps and is continually looking for a way out. If the SICAVs no longer serve any purpose, another figure is put in place: these are the “free investment companies” (SIL). These are vehicles that allow you to invest in shares, public debt, real estate or even works of art, but they have the advantage of being taxed at 1% Corporate Tax. They require a minimum investment of 100,000 euros (reserved for professional investors) and at least 25 participants. A privilege reserved for the rich. Here we explain how Spanish billionaires are abandoning SICAVs and starting to create “SILs” to pay 1% taxes.
The data
117 billion euros
Foreign investors (funds, banks, insurers and retailers) have been dedicated to buying back Spanish public debt since the end of 2022. The interest of foreign capital in our debt reverses the mantra of legal uncertainty constantly exploited by part of the world of business and the neoliberal right. The Spanish economic situation is solid, it is appreciated abroad, in a context unthinkable ten years ago: Spain finances itself less expensively than France. The Financial Times newspaper highlighted in an article this week that Spain has become the sixth global destination for foreign direct investment – the third in Europe – in sectors such as renewable energy, automobiles, real estate and real estate. electronic. components. Here we explain how foreign investors are devouring Spanish debt.
In this way, while companies do not want to pay the taxes they owe while making record profits or billionaires find formulas to pay only 1%, the average Spaniard tries to save to not not risk expulsion or ruin again. The savings rate of Spanish households increased in the first half of this year to reach almost 14% of their gross disposable income. This is the maximum level since the record of the first half of 2021 and a behavior which surprises economists as the moderation of inflation is consolidated and there is a historic creation of jobs: new record with 21.8 million workers in the third quarter of 2024. is the reason for these savings? A trauma, yes, a generational trauma. Raymond Torres, director of the economic situation of Funcas: “It is the trauma of the financial crisis, which we know that in other countries such as Japan, it marked an entire generation. “After the financial crisis, households and businesses tend to behave with particular caution in an uncertain environment. » Here we explain how the trauma of the financial crisis is pushing family savings to exceed historic levels.
The graph
Savings are necessary to access the purchase of housing, a mission impossible for Spanish citizens and those across Europe. Housing has become 58% more expensive in the EU since 2014, but it has also soared well beyond wage growth in the vast majority of countries. This is how Europe is suffocating with real estate prices.
Are you considering buying an apartment? We give you clues for choosing a neighborhood. Here we present the map of income inequality in Spain. You can explore new data on median income for each street (by census tract in 2022) after the pandemic and inflation crisis. A map that draws new internal borders, drawing gaps between the countryside and the city, the north and the south and the rich versus the poorest neighborhoods.
To solve the problem of high rental prices, the central government has designed tight zones where prices should be limited. The Autonomous Communities of the Popular Party have refused to apply them, even if the owner and tenant benefit from them. In fact, fiscally, the owner wins. Here we explain how distressed area tax benefits compensate landlords more than tenants with rent reductions.
Meanwhile, even though the situation may be desperate for many families, the abuse continues. Consumer Affairs is investigating several agencies for unfair and illegal clauses more than a year and a half after the law prohibiting charging fees to tenants came into force. In this case we took in flagrante delicto and with a recording of an employee of the RedPiso agency in which she requested the agency’s commission. This is the real estate trap of continuing to charge rental fees.
Every time he speaks, the bread rises
The sector must think seriously and try to explain to society that we are useful
Jose Ignacio Goirigolzarri
— President of CaixaBank
It was with these words that José Ignacio Goirigolzarri tried to explain the scandal that hit the president of BBVA, Francisco González, for the hiring of Commissioner Villarejo to carry out work that prevented Sacyr’s takeover bid. It was in 2019, when Goirigolzarri was president of a nationalized Bankia after a financial crisis which wiped out a good part of our country’s entities and financially asphyxiated citizens. This week, the departure of a banking executive who held the highest positions at BBVA, Bankia and Caixabank was confirmed: Goirigolzarri will leave the presidency of the Catalan bank as of January 1, 2025. Farewell to a banking story. Goirigolzarri, a survivor who left Francisco González’s BBVA and led the Bankia rescue.
public good
Information helps make decisions. No one doubts the power of information to change public opinion or twist the arm of politicians when it comes to legislating. Businesses know it, those in power know it, politicians know it. Since the emergence of the Internet, journalism has had to contend with digital intermediaries as well as corporate power to gain access to citizens. The platforms have changed but the dependence remains the same because we are talking about traffic, which translates into advertising revenue. Spanish media has moved from Facebook to Google Discover. The search engine’s algorithm is opaque but above all it generates large traffic flows to misleading content, worthless information or redundant ratings from supermarkets like Mercadona. Just as it gives you, it takes away from you. Disinformation distributors. Here’s a report from Carlos del Castillo on “algorithmic journalism” and how misleading headlines and supermarket articles succeed.
We love competition
In this section we present articles from other media that we found interesting:
We are finished. We will see each other again next Thursday. You will have more economic news next Thursday, in a new newsletter. We remind you that you can follow us on the social network X and write to us at contraoferta@eldiario.es with your proposals, complaints or ideas.
Have a nice week!
