Wed. Sep 28th, 2022

Madrid (EFE).- The Congress of Deputies approved this Thursday the suspension of the deficit target for 2023, considered as a previous step for next year’s budget that the government wants to present “in a timely manner”.

The government’s proposal to suspend fiscal rules for a third consecutive year in the face of exceptional circumstances stemming from the war in Ukraine has the support of PSOE, United We Can, ERC, PNV, EH Bildu and citizens. To which the absence of PP added. Thus, the assessment was approved with 195 votes in favour, 53 against and 95 abstentions.

With this approval, the way is cleared for the presentation of next year’s budget project, which the Minister of Finance, María Jesus Montero, plans to register “in a timely manner” and for the discussion of which he asked the groups to “responsibility”.

The deficit target for 2023 has become a mere reference

As in previous years, the government asked Congress to appreciate that the exceptional circumstances provided for in Article 135.4 of the Constitution and in Article 11.3 of the Budget Stability and Financial Stability Act exist to suspend financial rules in line with the European Commission.

Thus, the deficit target for 2023 is no longer binding and has become a mere reference both for administration (3.9% of GDP, 1.1 points less than in 2022) and for subsectors.

Target-Deficit-Budget
Archive image of a plenary session at the Congress of Deputies. EFE/Juan Carlos Hidalgo

With the suspension of fiscal rules, the government approved a “record” spending ceiling of 198,221 million euros – not subject to congressional approval – with which it hopes to combine economic growth, job creation, investment efforts and protection against inflation.

In this sense, Montero opened the door to extend some measures to reduce inflation – including fuel rebates – beyond the end of the year and even include extras, although this possibility was not included in the cost calculation. Ceiling

Demand for a rebalancing plan and financial arrangements

Most groups agreed that conditions exist to suspend fiscal rules, although they criticized the lack of a rebalancing plan and the need for new fiscal measures for higher incomes.

In this sense, Montero advanced that he is working on the possibility of creating a new temporary tax for large fortunes, which will take effect in 2023, independent of the wealth tax.

The demand for a tax on large fortunes was one of the main points of intervention by United We Can spokeswoman, Texema Guizarro, who requested a reduction in VAT for women’s intimate hygiene products and veterinary services.

Ciudadanos also voted in favor “because Europe has identified it this way”, defending his economic spokeswoman Maria Muoz, who called for and complained against a balanced plan to prevent flexibility from becoming “an excuse to deviate more than necessary”. “Irresponsible” revaluation of pensions with inflation.

Nationalists voted in favour, PP abstained

ERC deputy Joanne Margal showed her support for suspending deficit rules because “extraordinary circumstances require extraordinary measures”, but asked for “courage” to go further, to change the budget stabilization law and “repeal Article 135 of the Constitution” to promote expansionary policies.

Similarly, the PNV supported the text because the situation “remains extraordinary” and because this flexibility allows states, autonomous communities and municipalities to “use all tools” to alleviate the effects of the war, according to its deputy Idoya Sagastizabal.

“We agree that fiscal rules continue to be suspended”, agreed the deputy of EH Bildu Mertxe Aizpurua, who advanced that he will take “responsibility” to the budget negotiations which he hopes will include “structural” policies for the benefit of the social majority. PdeCAT also voted favorably, considering that there were circumstances which supported it; Other countries that have called for a tax reform include the Canarian Coalition, the PRC and Teruel.

According to Deputy Elvira Rodriguez, the PP defended its abstention because, although it accepts exceptional circumstances, it misses deadlines and procedures, including a medium-term rebalancing plan.

Instead, according to Deputy Ivan Espinosa de los Monteres—and the Foro Asturias, they rejected Vox—to avoid “uncontrollably engaging in cost overruns.”

Web version: Belen Mayo

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