Saturday, December 10

Brussels responds to Feijóo’s PP that “it may be more useful to give support to families and companies than to lower VAT”

The PP insists on lowering taxes. But in Brussels they have it as clear as Alberto Núñez Feijóo, Isabel Díaz Ayuso or Juan Manuel Moreno Bonilla. If a few days ago the European Commission warned that the income from taxes “is very necessary” in the middle of the PP’s race to lower them, this Monday the European Commissioner for Economy, Paolo Gentiloni, has answered the questions of the MEP Isabel Benjumea in the Economic Committee of the European Parliament.

Brussels warns that tax revenues “are very necessary” in the midst of the PP’s race to lower them

Know more

Benjumea has sought the complicity of the European Commission in its tax dispute with the Spanish Government. But he has not received the good words that he expected, to the point that he has questioned the Italian socialist commissioner three times. The PP MEP has tried to get Brussels to support “tax rebates, income tax cuts, incentives” in alleged amendments to the recovery plans, agreed and approved with Brussels in the spring of 2021.

“As a rule”, said Gentiloni, “my answer is that the States must apply what was agreed in the recovery plan. An agreement was reached at the time and that is the basis of the recovery and resilience instrument. Then, there is a series of States that have seen their allocation increased or decreased [en España, aumentó en más de 7.000 millones por el agudo golpe de la pandemia] and that they are looking at how to adjust their plans with an addendum. If that entailed fiscal measures, we would study that there is sustainability, because the Commission studies them not only from the point of view that it is legitimate to intervene at the fiscal level, but we also contemplate them from the point of view of sustainability”.

Indeed, Gentiloni reminded the PP’s new secretary of European Funds that fiscal sustainability has to do with both what is spent and what is received. “In the current context, fiscal resources are very necessary, we need income”, explain community sources: “Spain is now receiving a lot of money from the recovery and resilience funds and, by its own decision, has decided to channel a good part of that money to through the autonomous communities. But that money will run out [en 2026]”.

Benjumea has also insisted on seeking support for the VAT reductions that the PP defends. This Monday the president of his party, Núñez Feijóo, has asked to lower VAT on basic foods. “In general”, said Gentiloni, “we have very clear rules on the possibilities of reducing VAT or consumption taxes, and very clear guidelines on what can or cannot be decided last April, it does not so long. This is something to respect, it cannot be reduced beyond certain limits”.

Gentiloni, in addition, told the PP MEP: “In an emergency context, we must be careful with the reduction of consumption taxes, because we must support the energy transition, the climate transition, and it can be more useful support vulnerable families and businesses that reduce VAT or consumption taxes. We ask that they not only reduce VAT, because we can support it in a different way without undermining the climate transition.”

The Italian commissioner also explained to Benjumea that “the European Commission has been committed to reducing tax differences within the EU for years, when they are the result of aggressive tax planning and endanger the single market and fair conditions. It is a general objective in the country recommendations. The Commission has no intention of equalizing the tax policies of the Member States, the differences exist, but we try to avoid aggressive tax planning and an application of the global agreement of 15% minimum corporate tax for multinationals. Beyond that, the discussion within the member states is legitimate, it is not something that the European Commission wants to interfere in”.

Calviño: “The PP has launched a process to dismantle the welfare state”

The first vice president, Nadia Calviño, spent Monday in Brussels with several meetings with European commissioners to discuss the progress of the Spanish recovery plan and the plans for the Spanish presidency of the Council of the EU, which will take place in the second semester of 2023.

Upon his departure from the European Commission, Calviño has responded to the latest proposal by the PP leader, Alberto Núñez Feijóo, to lower VAT, as well as the race of popular regional leaders to cut taxes on the rich, as is the case of Madrid and Andalusia.

“In general, I get the feeling that the Popular Party is trying to launch a smoke screen so that we do not talk about that race to the bottom of the leaders of certain autonomous communities that have launched a process to dismantle the welfare state starting due to the reduction in the tax on large fortunes, the wealth tax”, Calviño stated.

“I think that this type of constant announcements that we are seeing try to throw up a smoke screen so that we do not talk about what the Popular Party is really doing in those autonomous communities in which it governs, which is dismantling the Welfare State” , Calvino has assured.

In relation to the current context, with a recession that threatens to appear, the vice-president has pointed out: “We are in a situation of great uncertainty regarding the evolution of the European economies, especially those that have greater exposure and greater dependence on regarding the supply of Russian gas. The economic forecasts are clear regarding a slowdown in economic growth, but also regarding the strong growth that has been registered in Spain last year and also so far in 2022. All the organizations continue to forecast that the Spanish economy will grow by above the European Union average, the OECD average and above the large countries of the euro area and the European Union”.

Regarding the development of the recovery plan, Calviño has assured that in the European Commission “there is a very positive assessment of the deployment of the Plan in Spain, the positive impact of some emblematic reforms is confirmed, such as, for example, the reform of the worked. We have begun to exchange elements of the recovery plan addendum that we hope to present in the course of the fall [para pedir la parte de los préstamos correspondientes a España, otros 70.000 millones]”.

In relation to the impact of the victory of the extreme right in Italy, Calviño has responded: “It is not our role to assess the electoral results in another country. From the point of view of Spain, we are interested in having the best relations with a partner as important as Italy. I trust that he will continue to have a constructive and pro-European attitude”.

Lastly, the vice-president spoke about the ECB’s rate hike: “The European Central Bank is responsible for fighting inflation and, in the case of our country, the governor of the Bank of Spain, who is the one who participates in its governing council of the ECB. And I am sure that in all these debates and in all the decision-making, the need to tackle inflation is taken into account, without thereby putting at risk the strong economic recovery and growth and job creation throughout Europe, especially in our country”.