The first decision of the new coalition Government has been to approve the Ministerial Order of the Treasury in which the rules for the preparation of the first General State Budgets (PGE) of the legislature are dictated. Thus begins the preparation of the most important bill, which will contemplate a disbursement schedule of up to 25.6 billion in 2024 from European funds, between transfers and loans.
The order signed by the fourth vice president and Minister of Finance and Public Function, María Jesús Montero, foresees that during the next year the geopolitical instability derived from the war in Ukraine will continue, now also aggravated by the conflict between Israel and Hamas. A complex context in which the Spanish economy will grow above the European Union average, according to all national and international organizations.
The main line of the future bill is to “maintain a prudent and responsible economic policy from a fiscal point of view, which continues to generate quality employment.” In a scenario of return to fiscal rules, still unspecified, Spain must continue reducing the public deficit, which has gone from 10.1% in 2020 to 4.8% in 2022. The forecast is that it will be at 3% in 2024, according to the path contemplated in the budget plan that Spain sent to Brussels in October.
The plan for 2024 contemplated an inertial economic scenario. However, in recent weeks the Government has been announcing some measures that will increase the expenses section. For example, the extension of the VAT reduction on some foods until June or free public transport for some groups. The extra collection that will be achieved will cover this aid, explained the Treasury.
The ministerial order that marks the beginning of the Budgets contemplates several priorities. One of them is to finish deploying the Perte associated with European funds. The Government highlights that calls and tenders for more than 30,000 million have already been approved, which have benefited 500,000 projects. Community resources are essential for the objective of changing the production model and increasing GDP by 3 percentage points on average until 2031.
Housing, with its own ministry, will be another of the objectives of public accounts. Specifically, they will influence “the right to housing by increasing the public stock for affordable rentals through a public investment policy.” Also the decarbonization of the economy or the reinforcement of employment policies.
The order also contemplates the promotion of “a great income pact for price stability that guarantees the recovery of the purchasing power of salaries”, a shock plan against long-term unemployment, improving and simplifying the level of unemployment assistance and consolidate improvements in social protection and benefits for the self-employed.
The budget proposals of the 22 ministries will be sent to the General Directorate of Budgets before December 11, 2023. The Government’s objective is to be able to have public accounts as soon as possible that give continuity to the social policies that reinforce the classes middle and working women and also vulnerable groups, in addition to supporting SMEs and the self-employed.
The Treasury is aware, however, of the difficulties that the budget bill could have in the Senate, controlled by the PP with an absolute majority. The upper house will be in charge of validating or rejecting the stability path for the period 2024-2026.
