The Government has already begun the negotiation for what will be its main priority at the beginning of this new political course: the approval of the General State Budgets. Although PSOE and United Podemos have not yet begun to meet, the purple ones have already taken positions for a negotiation that is expected to be tough and will demand a minimum rate in corporate tax for large companies, the establishment of an allowance per dependent child, measures to lower the price of electricity or the implementation of the housing law once and for all.
For the two formations that make up the Government, the General State Budget is a key negotiation because it will define the Executive’s roadmap for next year . The text that comes out of the talks between PSOE and United We Can will be the draft with which the Government will have to convince its nationalist and progressive allies to get the accounts ahead, but it will also serve as a thermometer of the influence of the purple within the Executive, since they will be the first accounts to be negotiated without Pablo Iglesias as their leader.
The Government approves a record spending ceiling for 2022 and kicks off the budget negotiation
The purple ones did not want to waste time and, last Monday, their organic spokesperson, Isa Serra, raised the need for next year’s Budgets to be the basis for a “just social and ecological transition.”
It seems clear that the Government will design expansive accounts, given that it has decided to keep the tap of public investment open by approving a record spending limit for 2022. United We can hope that this money will serve to implement some of its more proposals. ladies. Training sources also point out that the negotiation will address issues that are not strictly budgetary but that they consider essential in the government’s political action.
No one gives up on rents
This is the case, for example, of the housing law and, especially, of the regulation of rents that must be included in it, as agreed last year by PSOE and United We Can. Both parties agreed in October 2020 to begin processing this rule, at the latest, in February of this year precisely to close the negotiation of the 2021 Budgets.
But the discrepancies between socialists and purple regarding leases have delayed it: United Podemos insists that the agreement is to limit and lower prices by law, while the PSOE proposes the freezing of prices in stressed areas, although allowing owners to increase the price up to 10% when they sign a contract with a new tenant.
The training that Vice President Yolanda Díaz leads within the Government refuses to define as a “red line” to support the Budgets the implementation of the rent price limitation. But the purple ones assure that this cap on leases by law does not have to be negotiated with the PSOE because it was already signed last year, and they affirm that what the Socialists have to do is comply with that pact. President Sánchez, however, considers that his proposal strictly complies with what was agreed with United We Can regarding rents. The pact between both formations raised the need to establish “mechanisms to contain or eventually lower prices, both for new contracts and existing contracts.”
The price of light
The second workhorse of United We Can in the negotiation of Budgets is the issue that has given the Government the most headaches in recent weeks: how to lower electricity prices. Both Sánchez and several of his ministers have announced that the Executive is designing measures to put an end to skyrocketing prices, but for now they have not disclosed details about the measures that the Ministry of Ecological Transition is betting on.
That department, responsible for energy policy, is designing alone the measures that the Government will implement, which has aroused United We Can, which understands that the ministries of Consumption and Social Rights should also have a voice and vote on this issue. .
On Monday, the former secretary general of Podemos, Pablo Iglesias, insisted on what has been the discursive line of his party for weeks and assured that “protecting the public interest implies putting limits on the electricity oligopoly.”
For the purple ones, it would be essential to create a public energy company, but in recent days they have pressured their PSOE partners with another measure of a more immediate nature and that, they understand, could be negotiated together with the Budgets because it would fall within the pact of coalition, unlike the start-up of a public electricity company: limit the price of hydroelectric and nuclear energy.
One of the fundamental causes of the increase in the price of electricity is that the current system establishes that all the energy generated is charged at the price of the most expensive to produce. Normally, this most expensive electricity is that produced in gas plants, and in recent months the price of this raw material has skyrocketed, causing a domino effect : as the price of gas rises, the cost of generating electricity from gas rises. The same, and that causes the price of the entire mix to grow even though it still costs the same electricity companies to generate light from technologies such as hydroelectric or photovoltaic.
What would be able to establish a fixed price for nuclear energy – as is already done in France – and determine from the Government a maximum price for hydroelectric energy is to mitigate precisely the detrimental effect of this system, says Unidas Podemos. Why? Because, although it would continue to be linked to the price of the most expensive energy, the price of light generated through cheaper technologies could only rise up to a limit , lower than it would if the price of electricity generated in were attributed without any limitation. gas plants, as before.
The socialist part of the Government, however, has rejected this proposal for intervention in the electricity market, arguing that it is not legally viable because the design of the electricity market works at the EU level. This was stated a few days ago by the Minister of Ecological Transition, Teresa Ribera, who stated that these measures would be “contrary to the community framework” – an extreme that United We can reject – and that adopting them would imply a risk of European sanctions.
A minimum rate for companies
Likewise, Unidos Podemos wants to start applying the fiscal reform agreed with the PSOE in the coalition agreement in these budgets, which has been suspended due to the outbreak of the pandemic but which the Government has promised to recover, although without setting deadlines. . The purple ones propose that one of the most outstanding measures of that agreement be put in place: to set a minimum rate of 15% in corporate tax for large companies.
Currently, the nominal rate of this tax on corporate profits stands at 25%, but large groups have on some occasions not paid a single euro in a perfectly legal way thanks to exemptions, deductions and tax engineering techniques. Given this situation, 1 30 countries agreed at the beginning of July within the OECD to establish precisely a minimum effective rate of 15% for large companies. And United We can take advantage of this international momentum to start the measure in Spain.
Aid for parents and a longer leave
The fourth issue that the purple ones are going to bring to the budget negotiation table is the family diversity law that the Ministry of Social Rights has been preparing for months. Minister Ione Belarra announced that the text would be ready to begin processing in early 2022. And, in it, United We can introduce two measures not contemplated in the coalition agreement but of which it has been the flag in recent months: the establishment of a “universal” allowance per child and the extension of maternity and paternity leave to six months – currently they are four.
“The family diversity law has to allow young people to have better living conditions, more dignified and allow those who want to have children,” Serra said on Monday, who assured that he would expand permits and establish a child benefit. In charge is “necessary for parenting and for families to be able to raise in conditions.”