The Government has once again lacked a political waistline and the opposition has had plenty of partisanship to bring the ember of discontent to its sardine. Spain, like all countries that import gas, oil and other raw materials whose price has risen dramatically, has become poorer as a result of what is called an external ‘shock’, a sharp increase in the amount of money we have to send abroad as a result of the rise in prices of those basic products that we import. and that sir feijoois not corrected with “a massive tax cut”, presented as the balm of fever that is as good for a broken, as for an unstitched.
Let’s remember some data and facts to counteract that fish memory that is imposed in today’s societies. Just a year ago, the consensus believed that the post-pandemic recovery (remember covid?) was taking hold, driven by ‘Next Generation’ funds and that the price increases of some products, as a consequence of supply bottlenecks, was something passenger. This has not been the case, partly because we are talking about basic products with a high concentration of supply that have been affected by something that, just five months ago, was unthinkable: the invasion of Ukraine by Putin.
In hindsight we know that this tension on the fuel market had been heating up for some time. Some say that Putin he was already accumulating foreign currency for the war. I remember that, in this column, I wrote more than a year ago, in February 2021, about the scandalous rise, by 46%, in electricity prices as a result of the confluence of an increase in the price of gas and a marginalist electricity market based on a logic incompatible with the massive entry of renewables whose marginal cost is zero. More than a year has taken the Government to accept this obvious reality.
Let’s continue with some more data: in the last twelve months, oil has increased its international price by an average of 80%; natural gas, 830%; maritime transport has multiplied its cost by six, cereals already closed 2021 with the highest price in a decade and industrial raw materials are at the highest of fifteen years ago. With this context, I remember that inflation closed last year with an increase of 5% in the eurozone and 6.5% in Spain.
It is evident therefore that the production cost problems came from before, as it is also evident that the war of Putin it has triggered them, drastically altering the priorities of economic policy in a Europe that imports 60% of the energy it consumes. Faced with this new rapid, dramatic and unexpected turn of events is when the Government has followed its calendar with a fixed rock, while reality slipped from its hands. And the opposition has preferred to channel social unrest against the government, warming up the streets instead of presenting the height of the state in the face of a challenge that, like the pandemic, transcends borders and partisan colors.
To do? Recognize the seriousness of the problem, the urgent need to do something that is feasible and useful and, above all, position it as a country problem that we must solve together. Fostering a dynamic of confrontation of all against all is to open an endless spiral. Although the comparison is very hackneyed, now some new Moncloa Pacts are necessary with which, by the way, we faced the other great external fuel shock that we suffered in the second part of the seventies of the last century.
Approaching the current complex situation from the unilateralism of a Government without any empathetic capacity or from short-term selfishness on the part or of the guild, shielded by threats and blackmail, would be to play sorcerer’s apprentices, the biggest possible mistake. Some new Moncloa Pacts must include measures that allow lower prices, offset induced costs, an income pact and reactivation measures with European funds as a guide. Specifically: there is some margin with taxes, as has been done with electricity, especially in a year in which there is a tax collection above what was expected; decouple the price of gas from the electricity market, paying its contribution to the guarantee of supply, but without accounting for it to form the wholesale price; a direct aid plan in the style of those launched during the pandemic and incorporating the 70,000 million euros in loans from the ‘Next Generation’ to the subsidies that we already have. To reinforce the effort associated with an income pact and avoid a new indexation of the economy, the total revaluation of pensions according to the CPI should be frozen, exceptionally, and focus them only on the lowest.
No time
There is margin. What is not left is time. But what we do will only be effective under two conditions: achieve a great social and political pact in the face of this new country challenge and that we recognize that the new distribution of the costs of the external ‘shock’ will result in a rise in the deficit and public debt . There are no hard four pesetas, nor room for demagoguery when there is a war for democracy in European territory.
Delaying decisions has been a mistake. And the frustrated negotiation with some transport associations, a hazing that has already committed, uselessly, a minimum of 500 million euros from the Budget. As I write this, I am not aware of the conclusions of this week’s European Council. But the normal thing is that it offers a range of measures in the medium term and national options in the short term. Nothing that justifies waiting to approve essential measures.
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France has not waited, approving aid last week that is not preventing it from growing, there too, they protest it in the middle of the pre-campaign. And Portugal, with the same electricity price as us, began with subsidies and tax cuts on March 4, having managed, for the time being, to control the protests. In both cases, the reduction in the tax on hydrocarbons has been accompanied by price subsidies, income compensation, suspension of tax payments and reductions in the tariffs for access to electricity networks, compensated from budgets. Let’s take note.
Finally, the alternative of not agreeing, not agreeing and continuing to promote confrontation in the street and the paralysis of the economy thinking that the worse the better, it would place us on the verge of a state of exception. Eye.