The experts gathered at El Nuevo Lunes breakfasts believe that the broad outlines of the Budget will follow the same line as the policies implemented by Mariano Rajoy’s previous government, and that it will aim to freeze spending and reduce the deficit by raising excise duties and corporate tax.
In this regard, Juan Pedro Marín Arrese, an economic analyst and professor at the IEB (UCM), believes that the Budget is more unpredictable than in other years, insofar as there is a larger and stronger majority opposition in Parliament that will make decision-making more difficult. “As in all these recent years, especially since serious budget adjustments began, the scope for creativity in the country’s public accounts is increasingly narrow. At present, virtually none. Previously there were spending items that could be cut because they were discretionary spending, but today that chapter has been exhausted. In this sense, the margin is very narrow and the only possibility to cover the €5,000 million hole, or whatever the deviation may be, is to increase revenues.”
At this point he refers to the government’s announcement of tax increases. “It is also true that raising excise duties is a controversial measure. But even more controversial is corporate tax. Everything will depend on whether it is a temporary measure, such as advance payments, or whether more far-reaching measures will be taken, such as limiting the offsetting of losses, which could have a greater impact.” Marín Arrese refers to the corporate tax reform that the Government is negotiating with Ciudadanos, the party led by Albert Rivera, which is considering limiting the offsetting of losses from previous years.
