Another confrontation

Another conflict over responsibilities in the heart of the government — this time between the Finance and Industry Ministries — has once again laid bare a lamentable problem: the absence of an authority with the capacity to coordinate economic affairs.

This in turn highlights the no less significant absence of active participation on the part of the prime minister in his role as a mediator between his subordinates. The outcome can be none other than a growing perception on a daily basis of a lack of common criteria in key issues, the latest of which is the thorny question of energy policy.

Finance Minister Cristóbal Montoro has since June being trying to limit the elbow room of his colleague at the Industry and Energy Ministry to reduce the hefty tariff deficit; the difference between the price charged for electricity and what it costs to produce it. It appears he is opposed to the imposition of different tax rates for the different types of technology used to generate electricity, with a view to raising 6.8 billion euros annually. However, it won’t be easy to reduce the deficit that has accumulated over the past decade without recourse to these taxes.

The proposal that renewable energy technologies bear higher tax rates than other technologies is at the core of the conflict, an issue that has raised concerns among some of the companies that could be affected. The department headed by José Manuel Soria, therefore, needs to adequately justify the policy of differential tax treatment and demonstrate its compatibility with the European Commission’s demands for non-discrimination against renewable energy industries. This also needs to be done with sufficient expedience and authority to lift the situation of uncertainty that is weighing on the energy sector as soon as possible. Given the importance of the sector and its contribution to the Spanish economy, clarifying its future is fundamental.

Beyond this need for urgent clarification, Prime Minister Mariano Rajoy needs to correct the failings in the makeup of his own government. The episodes of a lack of coordination have multiplied, particularly in ministries that have most to do with the economy. In a legislature marked by issues of this nature, the absence of a coordinator, or deputy prime minister for economic affairs, is a deficiency made all the more evident by the prime minister’s own lack of knowledge in this area. The absence of a clear controller capable of projecting sufficient authority in the current sensitive area of economic policy foments scenes such as that served up this week by Montoro and Soria.

It is also essential to remove any shadow of doubt concerning a possible conflict of interests between the finance minister and any of the companies that might be affected by the decisions taken by the Industry Ministry. At a time when management of the economy is the top priority of the administration, it is difficult to understand why the only means the two ministers in question have used to try to settle their differences in essential matters has been the media.