After weeks of intense negotiations, The Spanish government obtained this Thursday the endorsement of the Congress of Deputies for its budgets for 2022, marked by a record spending level, while the malaise in the country grows due to an economic recovery that is slower than expected. The Spanish Executive had the parliamentary support of the left, as well as small Basque and Catalan nationalist and independence parties, although it drew harsh criticism from the conservatives, the extreme right and the liberals.

In this way the socialist leader, Pedro Sanchez, ensures another year in power with a view to the next general elections, scheduled for now for the end of 2023, while he continues to govern in a minority and in coalition with United We Can. “We are thus taking a further step towards the definitive approval of some Budgets that will promote the recovery and the great modernization of our country. We continue!”, the Spanish president celebrated on his Twitter account. The legislative project will then be debated and voted on in the Senate, which will also endorse it. since the left has a majority in the Upper House.

Increase in wages and pensions

As with the 2021 budgets, Congress endorsed the 2022 public accounts by an absolute majority, with the vote of 188 of the 350 deputies of a dozen political forces, shows a very fragmented lower house in its composition. Since January 2020, when the government was formed between Socialists (120 seats) and United We Can (34), Sánchez has had to negotiate with other parties to overcome his parliamentary weakness, approve the budgets and the rest of the laws and maintain the state alarm in the toughest moments of the covid-19 pandemic.

The 2022 budgets foresee a record level of spending of 240 billion euros (about 269 billion dollars), financed in part with 27.6 billion euros (31 billion dollars) from the European macro-plan for economic re-impulse, of which Spain is one of the main beneficiaries.

Specifically, they include a series of social measures, such as the revaluation of pensions and salaries of civil servants, which will increase by two percent on January 1, as well as several measures against the precariousness of young people. Among the latter is a monthly check for 250 euros ($ 280) to help low-income 18-35 year-olds pay rent, and a cultural check for 400 euros (450 dollars) for 18-year-olds to spend on cultural activities.

These measures were mainly defended by United We Can, a minor partner of the government coalition, which conditioned its support to the adoption of rules to regulate the prices of rents to large owners in areas where the real estate market is stressed.

To approve the budgets, the government agreed to counterparts in exchange for the support of various small parties, among them the Catalan independentists of ERC and the Basque separatists of EH Bildu, which includes heirs of the political arm of the defunct armed separatist band ETA. With these sectors, the government promised to abolish tolls on certain highways and implement a measure that obliges audiovisual platforms to ensure at least six percent of their production in Catalan, Basque or Galician.

The Minister of Finance, Maria Jesus Montero, defended the agreements reached with both ERC and EH Bildu for being related to social rights or infrastructures. “In no case does it have to do with any question that the independence forces that separate us from them know, such as the very conception of the unity of Spain”, he said in an interview with the channel La Sexta.

Right-wing parties, unsurprisingly, questioned the credibility of the economic forecasts and criticized Sánchez’s “cessions.” Leaders of the Popular Party (PP) such as its leader, Pablo Casado, or the president of Vox, Santiago Abascal, did not step on Congress in any of the debate sessions or in the final vote this Thursday.

“Prudent budget policy”

These budgets with a strong social component should allow Spain to consolidate its economic recovery, threatened by a galloping inflation (5.4 percent in October) and a slower-than-expected reactivation of the tourism sector, on which 13 percent of jobs depend.

The Spanish economy, one of the most affected by the coronavirus with a GDP drop of 10.8 percent in 2020, it would not regain its pre-crisis level before 2023, according to the European Commission. The bad economic news has put pressure on the government, confronted by a growing social discontent, especially in the metallurgy and transport sector, Who threaten a strike when Christmas is coming.

Recovery must “reach all citizens”, recognized the Vice President of Economy, Nadia calviño, ensuring that budgets will allow “relaunching economic growth” and “reducing inequality.” For its part, the European Commission, which endorsed the Sánchez government’s budget project, said that “it is important” that Spain “maintain a prudent budgetary policy.”

Now the bill will be debated in the Senate, where parties can propose amendments that, if approved, would require a final vote in the lower house next month. Sooner or later, the plan will become the second consecutive budget approved by the coalition government, which came to power in January 2020.

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