Sánchez intends to mobilize 500,000 million with the recovery plan

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The 58-page document has green investment, expansionary policies, and the mobilization of public and private money as guidelines.

800,000 jobs and an arreón of two and a half points of GDP in three years. In addition to a firm commitment to a “new modernization” of the Spanish economy, which is highly dependent on sectors such as tourism and the automobile, which are suffering greatly. The Government of Pedro Sánchez has unveiled this afternoon the main lines of the Recovery, Transformation and Resilience Plan, a 58-page document designed to reactivate the post-covid Spanish economy with the invaluable help of the 140,000 million in European funds and the future General Budgets of the State, in the cooking phase. That plan is still a diffuse amalgam: it remains to see the fine print, to move from the muses to the theater. But the Executive’s report has three guidelines that are beginning to emerge with a little more clarity. One: green investment and digital transformation take 70% of the money, those are clearly the two bets of Spain (and Europe) for the medium term, whatever that is. Two: expansionary policies are here to stay; The increase in the spending ceiling of more than 50% (up to almost 200,000 million) is joined by a clear declaration of intent: there will be no fiscal consolidation “until Spain recovers the level of GDP prior to the crisis,” according to the document, which It is equivalent to saying, more or less, 2023 (as long as Berlin allows it). And three: the Government wants to leverage European money and mobilize with it up to 500,000 million public and private euros. Finally, it aims to raise half a billion euros through financial instruments and public-private collaboration. The same thing that Brussels tried to do with the Juncker Investment Plan: for every European euro Spain plans to mobilize four euros.

Felipe González promised 800,000 jobs back in 1982, on the eve of a very painful industrial reconversion; That figure haunted him for years. José Luis Rodríguez Zapatero pledged to create a million jobs in the green economy after the outbreak of the Great Recession, which soon after took away his Plan E, his presidency and the Socialist Party. Mariano Rajoy upped the ante to two million jobs in his last campaign, “without experiments or jokes,” shortly before being swept away in a motion of no confidence. Pedro Sánchez outlined this Wednesday the main lines of the Recovery Plan, of which the scaffolding is still barely visible: again those 800,000 jobs appear reminiscent of felipism, with the lever that allows the 140,000 million euros from the funds Europeans. The political objectives of the Sánchez Plan are clear. But the economic scaffolding is barely visible: the Government raised the spending ceiling above 50% on Tuesday, to touch 200,000 million euros, to activate a stimulus plan in the face of a fall in GDP that will far exceed 10% this year. These are the juiciest details in the economic chapter.

The numbers. The Government wants to accelerate the projects during the first three years, with 72,000 of the 140,000 million, to which must be added 79,000 million in structural funds and from the common agricultural policy. The 2021 Budget will include 27,000 million that the Government advances – via debt – until the European funds arrive. Thus, Moncloa intends to boost GDP by two and a half points by 2023, create 800,000 jobs and raise potential growth above 2%. 37% of the funds will go into green investments; 33%, in digital transition projects.

Keynes and the cuts. The declared objective of the Government is to significantly raise the levels of public investment, expansionary policies (or Keynesian) with a multiplier effect of 2.7 according to the IMF (for every euro invested, almost three are mobilized). And do not undertake cuts until GDP recovers pre-crisis levels. Judging by the government’s own estimates, that won’t happen until at least 2023. Keynes’s economic policy was based on saving in the fat years and spending when a crisis hits. Spain did not save after 2015, with the recovery. But now it has to spend to prevent the recessive hole from getting even deeper, with the help of Europe.

Reforms. That fetish word appears up to 17 times in the text. But this presence is very diffuse: in the labor market, the text ignores the partial repeal of the labor reform that it included in the coalition agreement, although it emphasizes dedicating resources to a vocational training plan and especially to the active employment policies. In addition, as for the tax reform, only vague references: the Executive intends to make the tax system more progressive, but there will hardly be any nuance in this regard in the next Budgets. A group of experts is activated to prepare a tax reform proposal. Regarding pensions, there are no big news: the Executive wants to encourage the delay of the retirement age, adjusting distorting elements in the regulation of early retirement; review the complementary social security system, promoting its development in the field of companies, and integrate the different pension regimes, such as those for the self-employed.


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