Jordi Sevilla believes that the Government should have accepted Feijóo’s proposal to deflate personal income tax | Economy

A missed opportunity. Jordi Sevilla, former Socialist Minister of Public Administrations, believes that the Government should have “taken the gauntlet” of Alberto Núñez Feijóo, leader of the Popular Party, to “deflate the low sections of the rate” of personal income tax in the face of the sharp rise in prices. The economist has suggested that an agreement in this sense would have favored the negotiations on the Income Agreement, which has remained deadlocked.

“There has been little interest in reaching an agreement”, Seville concluded during a meeting on the efficiency of public spending organized by the General Council of Economists (CGE) and the Institute of Economic Studies (IEE), in which Íñigo also participated Fernández de Mesa, president of the IEE and vice president of the CEOE. “I have missed a little more greaser will on the part of the Government”.

The former minister of José Luis Rodríguez Zapatero has commented that the inflation data known this Monday, a rebound in May of 8.7%, is “bad”, although he believes that throughout the year the rate of growth in prices will increase. losing steam. A point on which Fernández de Mesa has agreed, before stressing that high inflation “is an argument for being very prudent in the fiscal sphere.”

Spending efficiency

The pandemic has caused an unprecedented explosion in public spending, raising the deficit and debt to unprecedented heights. Both Fernández de Mesa and Sevilla have agreed that it is key to build indicators to assess the efficiency of Administration disbursements, an exercise that requires a change in culture and a long-term political commitment. However, their starting points are different.

Sevilla, who during his time as minister created the Agency for the Evaluation of Public Policies in 2007, considers that the debate on the efficiency of public spending should be left out of the situation. “You have to ask yourself what is the purpose of public spending. I think its objective is to see if it serves what it has been designed for, ”he pointed out. “There are moments and situations in which we want the State to intervene, and we do it through the debt. They are two different debates. One thing is the efficiency of spending and another is to see how it is financed. ”.

He knows in depth all the sides of the coin.

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Fernández de Mesa, on the contrary, believes that when it comes to public spending, it is not the same to have a surplus or a deficit, even less so at this time of uncertainty, with skyrocketing prices, a war in the heart of Europe and before the Central Bank’s announcement European to withdraw the stimuli. “The risk is going to increase,” he warned during the meeting, presented by the president and vice president of the CGE, Valentín Pich and Amelia Pérez Zabaleta.

Spain has shot up its red numbers due to the pandemic: the debt exceeds 115% of GDP and the structural gap in the accounts is above 4%, a situation that, according to the vice president of CEOE, requires a signal to be given. “You can have public spending of 70%, but you must be able to finance it,” he insisted. “Here it is financing with a deficit, therefore the pressure and the importance, if possible, of exercising efficiency policies is greater than that of a country like Australia, New Zealand or Germany, which have very low debt and many of them have structural surpluses. ”. According to a recent study presented by the body he directs, the IEE, Spain could reduce its public spending by 14%, which is equivalent to around 60,000 million euros, maintaining the same level of services.

“Things are clearly not done overnight, but there is room. I think the first thing is to recognize the problem”, the economist clarified. And for this, he has insisted, indicators capable of measuring the efficiency of spending are needed. A point in which Seville coincides. “Indicators are fundamental,” he stressed. “Let’s take what has already been done and fulfill it. But a single party cannot do it, an agreement is needed so that it can be fulfilled and that it be done during the necessary time, which lasts more than one legislature.”