The Spanish political scene was in turmoil on Monday after EL PAÍS revealed the contents of a letter that acting prime minister Mariano Rajoy sent to the European Commission.
In the letter, Rajoy said that if he is re-elected at the upcoming elections of June 26, he is “prepared to adopt new measures, if required, in order to meet the [deficit] target.”
In public, Rajoy, of the Popular Party (PP), has denied that Spain will require any further spending cuts following a raft of unpopular measures that were taken at the height of the economic crisis.
This letter confirms that tax breaks now will become cuts in the future
Podemos economy chief Nacho Álvarez
The opposition and the unions reacted strongly to the suggestion that Rajoy might be considering new adjustments to bring down the public deficit from its current 5.1% of GDP to something closer to 3%.
The main opposition Socialists said that the PP must put its proposals for cuts to a vote and include them in the party platform. Socialist leader Pedro Sánchez stated on Monday that Rajoy “lies shamelessly.”
According to Socialist official Jordi Sevilla, Sánchez will soon detail his own plans for meeting deficit targets: renegotiating deadlines with Brussels, a tax reform that will not affect income tax but raise wealth, corporate and environmental levies; and a drastic cut to public agency spending.
Meanwhile, the emerging Ciudadanos wondered why Rajoy is making pledges if he doesn’t know whether he will be re-elected, and the new leftist coalition Unidos Podemos called it “his hidden electoral agenda.”
“Mariano Rajoy should be more prudent and not advance any decisions when nobody knows who will be in charge after the elections,” said Ciudadanos leader Albert Rivera shortly before flying to Venezuela to support the opposition. His party proposes meeting deficit targets through greater savings by government agencies and a crackdown on tax fraud.
The anti-austerity Podemos suspects that Rajoy is getting an easy ride in Brussels because Commission President Jean-Claude Juncker is a conservative like himself. It was Juncker who recently decided to postpone sanctions against Spain for its continuous deficit target misses until after Spain holds elections.
“European authorities are flexible on budget issues depending on whether a government is on one side or the other of the political spectrum,” said Podemos economic chief Nacho Álvarez. “This letter confirms that tax breaks now will become cuts in the future.”
Podemos has a completely different macroeconomic model in mind based on greater public spending and increased state revenues through a progressive tax reform.
Opposition parties and the labor unions CC OO and UGT will try to get Rajoy to provide explanations in Congress. “This letter could affect citizens profoundly, so the acting prime minister must meet with the Permanent Committee to clear up its contents,” said CC OO leader Ignacio Fernández Toxo.
English version by Susana Urra.