This Tuesday, the Government approved the line of public guarantees for the purchase of a home by young people up to 35 years of age and families with dependent minors, a measure for which 2.5 billion euros are mobilized through the Official Credit Institute. (ICO). “Today we take one more step, we fill one more layer of concrete to consolidate housing as the fifth pillar of the welfare state,” said the Minister of Housing, Isabel Rodríguez, in the press conference held after the Council of Ministers.

The public guarantees approved this Tuesday cover up to 20% of the price of the home (up to 25% if it has an energy rating of D or higher) and may be requested for the acquisition of a first residence that is the buyer's habitual and permanent residence.. As Rodríguez explained, the objective is to support those people who want to buy a home and due to lack of prior savings cannot afford the down payment on the mortgage.. “The State will be its guarantor,” explained the minister, who has estimated the number of beneficiaries to be reached at 50,000 people.

To access these guarantees, the applicant must be a natural person over 18 years of age and their income may not exceed 37,800 euros per year per person (4.5 times the IPREM), an income level that is adjusted if it is a couple or there are minors in charge. In this way, if the home is purchased by two people, the income limit is raised to double. The threshold increases by 0.3 times the IPREM (2,520 euros gross per year) for each dependent minor and, in the case of single-parent families, the limit can increase by an additional 70%.

In addition, you cannot have assets of more than 100,000 euros and uninterrupted residence in Spain is required for the two years prior to applying for the loan.. Given that the objective is to facilitate access to a first home, those who are already owners will not be able to benefit from these guarantees, unless they prove that they cannot have their apartment due to separation, divorce or any other cause beyond their control or because it is not accessible. In the Community of Madrid there is already an initiative similar to the one launched this Tuesday by the Government. This is the My First Home program, which in 2022 made it possible for a thousand young people to sign almost 650 mortgages.

Regarding the maximum price of the home whose purchase can be guaranteed with this new tool, the minister has pointed out that the income requirement itself will condition the loans that financial entities are willing to grant, given that the buyer must be able to pay. the monthly fee. “The income indicators will already determine what types of mortgages can be requested,” he explained, while clarifying that, however, the agreement between the ICO and the ministry will establish a maximum limit for the sale or appraisal price. depending on the location of the home. “The ultimate objective of the ministry is that to access decent housing no Spaniard has to dedicate more than 30% of their income,” he added.

Once the conditions and requirements of the guarantees are approved this Tuesday, it will be the financial entities that will have to adhere to the agreement that the Ministry of Housing is going to sign with the ICO if they want to offer their clients the possibility of benefiting from public support. “It is an agreement with the ICO that we are going to close after this agreement of the Council of Ministers to which the financial entities, with which we have already held conversations, will have to adhere later,” explained Rodríguez, who said he trusted the willingness of the banks to take advantage of the initiative.

The period for the return of state guarantees will be ten years, during which the home must be maintained as a habitual residence – it can only be rented in the event of a move due to marriage, separation or job transfer.. The new instrument can be requested until December 31, 2025, although there is the possibility of it being extended for two more years. The head of Housing has assured that the initiative will contribute to freeing the rental market in stressed areas, by allowing the departure of those people whose desire is to acquire a home to own and thus leave space for those who prefer to rent.

Rodríguez has recognized that housing “is a complex problem, where there are no easy or unique solutions”. Along with the agreement concluded this Tuesday, the Ministry of Housing is also finalizing another agreement with the ICO for the construction of 40,000 homes through loans to public and private developers, an initiative that the Government approved at the end of 2023 and that it intends to launch before May the month of February end.

“Free of ties”

The Association of Financial Users (Asufin) considers it “critical” that ICO guarantees are granted “free of links” to other financial products, that is, that the possibility of banks offering to reduce mortgage interest rates is prevented. granted together with the guarantee through, for example, the contracting of insurance. From Asufin, they also believe that “a mortgage for the purchase of housing can limit the professional development of a young person”, by limiting their mobility, and they call for promoting a “solid” officially protected rental housing policy instead of encouraging buys.

Furthermore, they consider that, without an adequate stock of affordable public housing, the new guarantees can become a “disguised subsidy” for developers.. “In certain towns, housing prices are extremely stressed and this disproportionate cost will not be assumed by the developer of new housing, but by the young buyer,” they warn in a statement.

On Tuesday, the Government gave its approval once again to the budget stability objectives, an important step towards finalizing the 2024 public accounts. This comes after the previous attempt was blocked by the PP in the Senate. The deficit limits for the State, communities, municipalities, and Social Security have been set at 2.7%, 0.1%, 0%, and 0.2% of GDP respectively.

Despite having a month to reinitiate the process, the Government decided to expedite the deadlines to avoid further delays in the already overdue budgets. The spokesperson for the ministry, Pilar Alegría, emphasized the importance of working efficiently to deliver the budgets as soon as possible.

The deficit path will now return to the Congress of Deputies where it is expected to progress with support from the Government’s parliamentary partners. However, it is anticipated that the PP will once again block the initiative in the Senate.

The situation following the potential second veto in the Senate is uncertain, as there are no guidelines for such a scenario. The fiscal rules have been suspended between 2020 and 2023, leaving no previous deficit path to follow.

María Jesús Montero, from the Government, argues that if the PP blocks the deficit path again, the one included in the Stability Program sent to Brussels last year should be applied. However, the PP disagrees, stating that without approved stability objectives, General State Budgets cannot be prepared.

The opposition party reaffirms that the autonomy-approved public accounts will not decline, a claim that is rejected by the first vice president.

In response to ongoing protests in the agricultural sector, Luis Planas, the Minister of Agriculture, Fisheries and Food, has scheduled a meeting with the organizations Asaja, COAG, and UPA for Thursday. These protests have been taking place in Spain for over a week and have recently escalated.

Today, farmers in Catalonia gathered for the eighth consecutive day, causing disruptions by blocking traffic on various roads, including the AP-7. Barricades made of burning tires and vegetation were set up, and tractors also arrived at Mercabarna, blocking two access points.

The Government returns to the spotlight with the Budgets. Less than a week after the PP overturned the deficit path proposed by the Treasury in the Senate – a necessary step to present the draft bill – the Executive will bring the same deficit objectives that were rejected in the Upper House to the Council of Ministers this Tuesday. This was confirmed by the Minister of Economy, Carlos Body, in an interview with Spanish Television.

“Tomorrow [Tuesday], after the Council of Ministers, the first vice president herself will announce and present the objectives. The important thing is to take these initial steps for the subsequent approval of the Budgets,” Corpo stated in statements to TVE reported by Europa Press.

The head of the Economy emphasized that the approval of these objectives is necessary to “alleviate the situation of the autonomous communities and give them greater flexibility” for 2024. “In fact, many of them have already approved or proposed their budgets based on the additional objectives that the Government provided,” the minister stressed.

The Council of Ministers will once again approve the deficit limits that the State, communities, and town councils can incur to prepare their public accounts without any change. These limits determine how much each administration can spend. According to sources from the Ministry of Finance, the idea is to present the same figures that the Senate rejected last week. That is, a deficit limit of 2.7% for the central government, 0.1% for the communities, 0% for town councils, and 0.2% for Social Security.

From the Government’s body, the deficit path will head towards Congress. It will likely receive the endorsement of the Executive’s parliamentary partners, as it did on January 21. The big question is what will happen when the stability objectives return to the Senate, where they will once again face the Popular Party’s absolute majority. The Treasury does not provide a deadline and indicates that the initiative will be processed again based on the decisions of the Congress and Senate tables, respectively.

The PP has made it clear that its decision will be “no” if the Government does not meet a series of conditions. This includes tax reduction, new stability objectives, and the creation of a state fund to finance regional public services. These demands have been rejected by the first vice president and Minister of Finance, María Jesús Montero.

The negotiation is at a standstill, and it is unknown what will happen next. The budget stability law does not specify the outcome when a double parliamentary blockade occurs. Furthermore, given the suspension of fiscal rules between 2020 and 2023, there is no clear prior deficit path that is in place.

The outcome is open to interpretation. Montero argues that if the Senate rejects the stability objectives, the deficit limits that the Government sent to Brussels in April 2024 in the Stability Program will be automatically applied. The PP, on the other hand, believes that the Government will not be able to present a draft General State Budget. However, they maintain that the budgets already approved by the autonomous communities would remain in effect, an interpretation rejected by Montero.

If the PP’s interpretation prevails, the only alternative for the Government is to try to reform the organic budget stability law to remove the Senate’s veto power. This process would slow things down further and require an absolute majority in the chambers.

On the other hand, if the Government’s interpretation prevails, a second rejection from the Senate would be needed for the Executive to take the preliminary draft of public accounts to the Council of Ministers. The Treasury has been silently working on this text for months to expedite the process once the first draft is presented.

Even if the Government manages to approve a draft law in the Council of Ministers, there will still be obstacles to overcome. The Executive will need to reach agreements with its various parliamentary partners, including Junts, which has already expressed its opposition.

Behind the scenes work

The minimum interprofessional wage (SMI) has never risen as fast as in the last six years. Between 2018 and 2024, the minimum that can be paid by law in Spain has increased almost the same as in the previous 14 years (2004-2018). A speed of improvement that medium and high salaries have not been able to match. This has caused what we could call “intermediate salaries” to become increasingly closer to the minimum remuneration, especially in those sectors where there are more workers receiving the SMI.

Consequently, the salary tables of many agreements are 'flattening'. That is, the pay differences between the highest and lowest categories are blurring. A phenomenon that unions such as Workers' Commissions (CCOO) have already detected and now place among their priorities in collective bargaining.. Although at UGT they do not share this perception.

The latest increase in the SMI, approved by the Government last Tuesday, closes a cycle in which the minimum wage has grown by 54% since 2018. The slowness of the salary statistics means that we still do not have data on how much the rest of the salaries have grown in 2023. But if we take the latest available data (2022) as a reference, the average salary increased by 9.5% since 2018, while the minimum salary increased by 36% in that same period.. That is, the SMI has grown four times more than the average salary in the country.

This growth at different speeds was an effect sought by the Government. The objective of the Ministry of Labor with the SMI is to reach 60% of the average salary in the country to improve the living conditions of the lowest incomes.. Something that the department headed by Yolanda Díaz already considers accomplished, although unions such as UGT do not agree that the goal has been achieved.

The logical consequence of this rapid rise in the SMI is that the differences between this remuneration and the average or median salary have narrowed.. And so it has happened. A worker who received the average salary in Spain in 2022 (2,128 euros per month in 12 payments) earned 82% more than the minimum wage. In 2018 that difference was 126%, 44 points more. In the case of the median salary – which divides Spaniards into two exact halves: those who earn more and those who earn less than that figure – the remuneration is now 55% higher than the SMI, while in 2016 it was double.

Agreements “overrun” by the SMI

One of the effects that were expected to be achieved with the increases in the minimum wage was, precisely, to boost intermediate salaries in collective agreements.. Following this reasoning, the 'floor effect' of raising the SMI should drag the salaries of the higher categories towards higher figures to maintain the highest and lowest differences.. However, it seems that what is happening for now is just the opposite.

“As a general rule, there is no such effect,” says Raúl Olmos, deputy in the CCOO union action secretariat, in conversation with 20minutos.. “We are seeing a certain flattening in the tables because the lowest salaries rise faster, but there are no increases in the same proportion or additional ones in the rest of the salaries,” he adds.. “The SMI has been overcoming the differences in the tables,” summarizes Olmos, who considers reopening those margins as “one of the pending tasks” of collective bargaining.

Olmos points out that both employers and unions are aware of this reality and recalls that in the salary agreement agreed upon last year it was established that the salary tables “must be consistent with the professional classification established in the agreement.”. A coherence that is blurring.

One of the most recent examples can be seen in the new State Agreement on Sports Facilities and Gyms recently signed. The difference between the salary in the highest category and the minimum in tables (which coincides with the SMI) is now 26%, while the gap in the previous agreement was 38%.

The most extreme case of this phenomenon occurs in the agricultural sector, where half of the workers receive the minimum wage.. In the field, agreements are beginning to be seen with directly flat tables, that is, without differences by category.. This is the case, for example, of the agricultural agreement in the province of Córdoba, which covers 60,000 workers.

However, this perception that the pay gap in the different categories is narrowing is not shared at UGT. The confederal secretary of the union, Patricia Ruiz, maintains that the increases in the SMI “are undoubtedly serving to encourage the rest of the salaries”. “There has been a need to protect working people and to differentiate themselves from the lowest salaries. An employer cannot allow all categories to have the same salary,” he points out in conversation with this newspaper. Ruiz points out that 36% of the agreements have tables affected by the SMI.. “In these agreements, collective bargaining has to be reactivated and adapted to the differences in responsibility of categories.”