The Socialist Party (PSOE) and left-wing Unidas Podemos will this afternoon present their joint governing deal, outlining the policies that they want to implement from their planned coalition government. The document, to which EL PAÍS has had access, contains the key points agreed on by caretaker Prime Minister Pedro Sánchez and Unidas Podemos leader Pablo Iglesias, which include tax rises for higher earners and large firms, an increase in the minimum wage and the partial overturning of aspects of the conservative Popular Party’s previous labor reforms.
Corporate tax will have a new minimum rate of 15%, while banks and energy firms will have to pay 18%
The PSOE won the repeat general election in November, but as at the April polls fell well short of a majority. In the wake of the vote last month Sánchez and Iglesias announced that they had reached a deal to form a coalition government. Sánchez will still need the support or abstention of other parties in order to get back into power, but this looks increasingly likely to happen early in the New Year given reports that the PSOE and the Catalan Republican Left (ERC) have nearly closed a deal to secure the latter’s abstention at an investiture vote.
According to the governing deal, which the parties are set to formally announce today at 5pm, income tax for those earning more than €130,000 a year will rise by two percentage points, and by four percentage points for those who earn more than €300,000. Capital gains tax will also rise by four percentage points above €140,000, to 27% compared to the current 23%. Corporate tax will have a new minimum rate of 15%, while banks and energy firms will have to pay 18%.
The parties are also planning to urgently ditch a law that allows for companies to fire workers who take official sick leave, as well as introducing measures to combat precarious and temporary jobs.
The minimum wage could rise by as much as 60% should the coalition government materialize
The minimum wage could rise by as much as 60% should the coalition government materialize, meaning the monthly sum paid to workers on this rate could reach as much as €1,200. With regard to pensions, the PSOE and Unidas Podemos are planning to eliminate the formula that links pensions to life expectancy, as well as getting rid of the revaluation index, which sees pension rises subject to the performance of the Spanish economy. This, the document states, will “ensure the sustainability of the system in the medium and long term.”
Over recent months, Brussels has insisted that reversing the reforms approved after Spain was bailed out with European aid in 2012 would be a mistake – in particular with regard to pensions and the job market. The plans by the possible coalition government would not do an about face on all of these reforms, but it would certainly shake them up.
English version by Simon Hunter.