Montero, the conjurer who must reform regional financing

2023-11-21 01:24:13

If there is someone who is strengthened in the new Executive, it is María Jesús Montero. The Minister of Finance and Public Function will continue to lead all of her responsibilities but expands her share of power by ascending to the fourth vice presidency, confirming that she is one of the president’s greatest and most faithful assets. Montero will have a complicated financial scenario, in which after three years with fiscal rules suspended, she will have to take scissors and have as her primary objective the reduction of the deficit and public debt, which is at an all-time high.

But its first challenge will be the preparation and presentation of the spending ceiling, a prior step to the preparation of the draft law for the General State Budgets (PGE) for 2024, which is faced after the deadline.

Although he has expressed that these accounts will be prepared based on fiscal responsibility, the PSOE and Sumar pact will complicate putting the scissors to spending, since the coalition partner intends to keep the spigot of the social umbrella open, which implies more spending. For now, the budget plan already sent to Brussels includes a forecast deficit of around 3% for next year – in line with what European rules will set – and a public debt ratio 14 points below its value in 2020. Therefore, if you want to complete the legislature and achieve your objectives, you will have to deal with a fragmented Parliament and partners who will demand what is demanded in their investiture agreements.

It also aims to achieve another major objective: equalize the Spanish tax pressure to the European one, despite the fact that it has tripled since the pandemic, so it will have to lead a tax reform “oriented towards families but coordinated with the social spending policy.” , has advanced. Under his arm he will bring the permanence over time of the taxes on banking, energy and large fortunes, the new regional financing model – with the forgiveness of underlying debt – and a comprehensive reform of the Public Service law, which maintains weapons to a good part of the officials.