Updated Friday, 8 October 2021 – 10:23
The employer warns that the PGE obviate the real situation of the economy with spending levels that are not justified and a fiscal pressure that will harm the internationalization of companies.
Antonio Garamendi, president of the CEOE.JOS AYMMUNDO
The businessmen grouped in the Spanish Confederation of Business Organizations (CEOE) have warned today that the project of General State Budgets (PGE) for 2022 that the Government presented yesterday has barely sustainable foundations from a fiscal point of view. Neither the expense, “which is not justified” nor revenues, “which hurt the most internationalized companies” they are consistent with an economic situation in which the intensity of the recovery is in doubt.
The employer maintains that, while waiting to know more details, the Budget project, on the expenditure side, “postpones the consolidation of public finances” while, for that of the income “supposes an increase of the fiscal pressure”. The sharp turn that the economy has taken at the end of the summer with an inflation that has exceeded all their forecasts does not seem to have been taken into account, in the opinion of businessmen. Neither did the slowdown in economic growth in the second quarter. “The Government should be more prudent in its macroeconomic forecasts, since it has maintained a growth of 6.5% for 2021 and 7% for 2022 despite the behavior of the economy in the second quarter, which has cooled expectations.”
The PGE presented yesterday establish a level of income that amounts to 232,352 million, 8% more than the almost 215,000 with which the Treasury expects to close this year. In this sense, employers have indicated that business pressure in Spain is 1.5 points higher than that of the EU (11.1% of GDP compared to 9.6%) and the collection from Spanish companies is equivalent to 31 , 9% of total income, compared to 24.6% of the European average. Entrepreneurs are aware that, far from narrowing, the gap can grow. The Treasury has already pointed out on different occasions that the Corporation tax should contribute much more than the almost 25,000 million euros to contribute next year. For this reason, it is preparing a tax reform that will be based on the recommendations of a group of experts in the first quarter of the year.
Regarding spending, CEOE ensures that the PGE project for 2022 places it at maximum levels in many items, something that is not justified in a context of economic recovery and historical highs of public debt. “We believe that this expansion of public spending compromises the sustainability of finances in the medium and long term and future mortgage the stabilizing capacity of the fiscal policy. “The businessmen also condemn that the spending strategy does not bet” decidedly “on economic activities and recall that the generation of employment is in itself also a social policy.
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