On Tuesday, the Government approved an increase in the minimum interprofessional wage (SMI) to 1,134 euros per month in 14 payments, which is 5% higher than in 2023. Additionally, public salaries will receive an extra 0.5% increase with retroactive effects to 2023. These measures will benefit about 5.5 million workers, representing 29% of all employees in Spain. Furthermore, the Government raised the minimum exemption from withholding in the personal income tax regulations to 15,876 euros, which is equivalent to the SMI for one year. This measure will prevent minimum wage recipients from having to pay any taxes.

Government spokesperson Pilar Alegría stated that these measures “dignify the quality of life of the people of this country” and highlighted that the SMI has increased by 54% since Pedro Sánchez took office in 2018. Vice President and Minister of Labor Yolanda Díaz emphasized that while there is still progress to be made, Spain is taking a decisive step in the fight against precariousness. Vice President and Minister of Finance María Jesús Montero noted that the modification of the minimum exemption from withholding will benefit 5.2 million taxpayers with low incomes, resulting in a total savings of 1,385 million euros in 2024.

While these salary improvements were previously announced by the respective ministries, their endorsement by the Council of Ministers is necessary for them to be reflected in payrolls. As a result, the 2.5 million workers affected by the increase in the SMI will see their salary statement at the end of the month showing a gross salary of 1,134 euros per month in 14 payments. They will also receive an additional supplement for retroactive effects dating back to January.

For public employees, the 0.5% increase varies depending on each case. The average salary of a public employee was 2,835 euros gross per month in 12 payments in 2022, so the salary improvement will be approximately 15 euros per month. As the increase is retroactive to the entire year of 2023, workers will receive a supplementary payment in February to compensate for the 13 months they missed out on. In this case, the amount would be around 195 euros.

With the latest increase in the minimum wage, the Ministry of Labor believes that the goal of reaching 60% of the average salary in the country has been achieved. However, unions argue that this milestone has not yet been met, and future increases should be tied to the evolution of other salaries or inflation to maintain purchasing power.

Regarding public employees, the agreed remuneration increase for 2024 is set at 2%, with an additional 0.5% linked to consumer price changes. The implementation of this improvement is pending the approval of the General State Budgets for 2024, which is not expected to be ready before March and may face further delays. The Executive has not clarified whether alternative methods are being considered to raise the salaries of public employees.

The PP will overthrow the Government's deficit path next Wednesday in the Senate thanks to the absolute majority it has in the Upper House. This was announced this Monday by the PP Deputy Secretary of Economy, Juan Bravo, in a press conference held at the party's national headquarters.. The negative vote of the popular ones threatens to torpedo the process of preparing the General State Budgets in which the Government is immersed. The stability objectives – also known as the deficit path – are an essential prior step for the preparation of public accounts not only of the State, but also of the regional and local administration.

Although the popular vote will be 'no', the main opposition party is open to reconsidering its position if the Executive gives in to a series of demands. The first of them is a tax reduction that includes a deflation of personal income tax – that is, an adaptation of the tax brackets to the rise in inflation or salaries -, a reduction in taxes on energy and expanding the reduction in food VAT to meat, fish and preserves.

Furthermore, the PP will demand a distribution of the deficit objectives between the State and the autonomous communities that is more favorable to the latter.. The objectives approved by the Government allow the autonomous communities to close their budgets with an imbalance between income and expenditure of a maximum of 0.1% of GDP, while the State reserves 2.7%, Social Security 0, 2% and local corporations 0%. Juan Bravo suggests that a balanced distribution could be 90% for the State and 10% for the autonomous communities, which would translate into a deficit limit of 0.3% of GDP for the autonomous sector.

The popular ones will also demand that the Government commit to respecting fiscal autonomy in all the autonomous communities.. Bravo has harshly criticized initiatives such as Sumar's, which proposes creating a state tax to tax inheritances in the autonomous communities that subsidize the tax on inheritances and donations.

As a last condition, the PP will demand that the Government create an autonomous fund to finance education, health and social policies of regional governments.. Although Bravo did not want to get involved with a figure, he did point out that the current Minister of Finance, María Jesús Montero, already proposed in 2017 the creation of a similar instrument endowed with 16,000 million euros.. This fund would also affect all communities, not just the underfinanced ones, Bravo added.

The Minister of Finance herself has reacted to Bravo's words this morning. “The demagoguery of the PP to vote against the stability objectives cannot hide the reality: the autonomous communities have received with the Government of Pedro Sánchez the largest resources in their history,” said the head of the Treasury in a message published in social network

Will budgets fall?

If the PP vetoes the Government's initiative in the Senate, the deficit path will have to go through the Council of Ministers again and go through the filter of the Congress of Deputies, which it barely surpassed last time.. The question is what will happen when the Executive finds itself facing the PP wall in the Senate for the second time.

The lack of precedent in this situation has opened the door to different interpretations about what would be the fate of public accounts.. The PP maintains that a second veto in the Senate would put an end to the State budget process. However, Minister Montero affirms that in this case the deficit objectives that the Government sent to Brussels last April in its Stability Program would be applied.

The first vice president says she has a report from the State Attorney's Office—the content of which has not been published—that supports her interpretation of the budget stability law, the rule that regulates the procedure.. Furthermore, the mess has one more twist. And Montero maintains that, if the PP's interpretation is true, not only the General Budgets of the State would decline, but also those of the autonomous communities, governed mostly by the popular ones.

Bravo rejects this interpretation and clings to the precedent of deliveries on account in 2019. On that date, the first government of Pedro Sánchez was trying to carry out budgets that also crashed against a majority of the PP in the Senate.. According to Bravo, Minister Montero also claimed to have a report from the State Attorney's Office that endorsed that without stability objectives there could be no deliveries on account.. However, the State was able to deliver the corresponding funds to the regional and local administration from the financing system. Likewise, the PP economic manager points out that the communities prepared their budgets with a spending ceiling of 0.1% of GDP, which was the information they had at that time.

However, the lack of precedents regarding the scenario that would occur if the Senate says 'no' twice to the stability objectives makes it difficult to anticipate how the conflict will be resolved.. In the event that the interpretation of the PP prevails, the only alternative that would be left to the Government would be to modify the budget stability law.. An extreme that would further distance the approval of public accounts that are already two months late.

Once again, the streets of Spain’s main cities and provincial capitals will be filled with tractors and farmers wearing yellow vests in protest of the current situation in the countryside. The three major agrarian employers’ associations have called for mobilizations this week and next, joining a larger protest movement that spans across Europe.

Similar to recent protests in France, Italy, and Greece, Spain will also witness demonstrations, although previous mobilizations in the country have been more subdued and have received less media attention. However, the recent striking scenes in Brussels, with blocked streets, street fires, and even the demolishing of a statue, have brought visibility to a group with shared yet contradictory demands.

The agricultural lobby identifies a common enemy: the European Common Agricultural Policy (CAP) and the increased bureaucratic measures introduced with its reform in 2021. They also criticize the influx of inexpensive agricultural imports from non-European Union countries, which puts Spanish farmers at a competitive disadvantage. Furthermore, they demand a resolution to the rising costs of raw materials and call for compliance with the food chain regulations.

The three major agricultural employers’ associations in Spain—COAG, Asaja, and UPA—are preparing a schedule of mobilizations to be announced between Monday and Tuesday, according to sources from one of the associations. As of now, protests have already been announced for February 8 in Salamanca, February 13 in La Rioja, and February 14 in Palencia. In provinces such as Zamora, farmers have already begun to mobilize.

The recent meeting between the agricultural lobby and the Minister of Agriculture, Luis Planas, on last Friday, failed to halt the protests. While the minister pledged to defend the farmers’ interests before the European Union, the associations consider it insufficient.

ASAJA, the most conservative of the three major employers’ associations, openly questions the discourse on climate change. They criticize the “absurd environmentalism” of the CAP, attributing bureaucratic hindrances as the cause of farmers’ struggles. On the other hand, COAG speaks of “regulatory asphyxiation” resulting from legislation that does not consider the reality of the agrarian sector.

Furthermore, they demand that agricultural imports from third countries meet the same standards as those required of Spanish farmers. This argument parallels the concerns raised by French farmers against Spanish products, a comparison that Spanish agricultural associations reject.

COAG also insists on compliance with the food chain regulations, which necessitate considerations of production costs at each stage when setting prices. They highlight the discrepancy between the ridiculously low prices that Spanish farmers receive for their products and the abusive prices charged by supermarkets.

The ongoing drought, which has resulted in significant crop losses, also compounds the challenges faced by the agricultural sector. The conflict at hand entwines the need to adapt to climate change and the decline of the industry. The latest reform of the European CAP includes incentives, known as “eco-schemes,” that encourage environmental practices aligned with EU objectives. However, receiving CAP aid, which is crucial for the profitability of farms, is now contingent upon complying with these eco-schemes, adding bureaucratic burdens and imposing conditions that limit production capacity.

As UPA, the small farmers’ association, argues, it is time to inform the European Commission that farmers are the main victims of climate change and are burdened with excessive regulations as they strive to adapt and mitigate its effects.

Produce green hydrogen in the Escombreras Valley, in Murcia, or green steel in Puertollano, in Ciudad Real. Electrify the ceramics industry in Castellón, develop circular economy projects in Cerceda (A Coruña) or hundreds of industrial and urban planning projects in Madrid. All these plans have two things in common. The first, that they will be a source of economic development and job creation. The second, that to become a reality they need to have guaranteed electricity supply, which at the moment is scarce and which has become the latest trigger for a 'war' between the central government and the regional governments – and, basically, between them. yes- for access to electricity. It depends on whether communities can implement large investments in their territories to build data centers or reconvert industries, which collide with the barrier of access to an electrical grid that is not prepared for it.. The Government had just expanded it punctually and in a way that the majority of autonomies consider insufficient and contrary to their own interests.. Looking at medium-term electricity planning, another conflict already appears on the not-so-distant horizon over the claim that communities with more renewable plants have the right to more access to the grid.

In the heat of European funds, their ability to attract investments, electricity supply has now become more than ever the key element for large companies and promoters of large industrial or energy projects to settle in different communities or for them to they can carry out the necessary energy transition of their traditional sectors. According to sources in the sector, in recent months there have been many contacts between businessmen and regional authorities, in a flourishing of projects with high electricity demand that the Ministry for the Ecological Transition also confirms.. In December it decided to start demanding financial guarantees and a time limit from those who requested access to the distribution network due to the “extraordinarily rapid growth” of requests.

Regional governments are competent in the planning of their territory and, as indicated in the sector, companies and promoters see in them much easier access to 'sell' their projects than in the central Government, to which communities now look to demand that provides them with something essential, the ability to connect to the grid so that the hundreds of projects that from Andalusia to Galicia and from Aragon to Murcia, passing through Madrid, are up in the air because it is not guaranteed that they will have electricity.

Due to all the elements it contains, in the energy sector it is considered that access to electricity will be one of the great wars that the Government and communities will fight in the coming years. Its origin can be traced to the middle of last December and the first battle, on Friday of last week, in the meeting between the third vice president, Teresa Ribera, and the regional Energy officials in which sparks flew.

64 projects from hundreds of plans

The trigger for the 'war' was the “specific” modification that the Ministry for the Ecological Transition is preparing to ensure that large projects that already have European financing – such as the Volkswagen electric battery gigafactory in Sagunto or the Andalusian Valley of the Hydrogen-, which were not planned when the current Planning was approved in 2020, can be connected to the grid before 2026. In mid-December, Ribera announced his intention to allocate 321 million to finance actions that ensure that Sagunto or the area of Huelva and Algeciras has sufficient access to the electrical grid, as well as in the Bay of Biscay, to ensure interconnection with France, in the area of As Pontes (A Coruña) to guarantee conversion after the closure of the thermal plant or in locations where electric pumping projects are planned.

The problem is that this plan was only about opening the network to allow access for 64 projects, when in the plans of the different communities there are hundreds that also need to have guaranteed electricity.. A few days later, Ribera advanced the Planning of the transportation network – from the generator to the substations – and electrical distribution – from the substations to the final consumer – between 2026 and 2030, a year ahead of schedule, but the communities and companies electrical distribution demand that their electricity supply be guaranteed immediately, at the latest in 2026. The Ministry does not see it so clearly and remembers that, according to the law, Planning can only be modified for very justified reasons, among which are not those alleged by the regional governments.

Faithful to her style of open confrontation with the Government of Pedro Sánchez, the president of the Community of Madrid, Isabel Díaz Ayuso, was the first to raise her voice against the “specific” modification and criticize that Ribera had ignored all the allegations that presented his Government for another 80 projects in the region. Madrid denounces that of 64 actions, Ribera only contemplates one in the Community, also without additional financial support. But the feeling of “grievance” was general in the allegations that communities, city councils or electricity distributors presented throughout the country. Murcia denounces that of the 321 million euros, the Ministry will only allocate 1.1 million and Galicia, that the specific modification perpetuates the “penalty” with which it was treated in the 2021-2026 Planning and that in total no more will be allocated than 2.6% of the total investment. Nor are the Valencian communities happy, 'graced' in December with 61 million for the electrical connection to the future gigabattery plant, or Andalusia, which has seen the so-called Andalusian Hydrogen Valley projects included and which, according to Ribera, “absorbs” the 10% of the planned investment, with the “additional efforts” of December. Even communities like Aragón, which is considered among the best served by the specific modification of electrical planning, hopes that in the end some more of its allegations will enter, to set up data or consumption centers.. In short, it was what Ribera described a few days ago as a “flurry of requests” that, he said, his Ministry “has not been able to attend to.”

Ribera opens to study the requests

The communities' claims are many and very high-sounding for everything to remain a matter of incapacity.. After weeks of public and private complaints for not taking their requests into account, Ribera called a Sectoral Energy Conference at the end of last week to explain to regional officials the specific modification of Planning.. However, the meeting turned into an avalanche of reproaches for not taking into account hundreds of projects that need electricity. Regional sources speak of a “quite critical” meeting with the vice president, who had to listen to how “all” the communities made her see that their electricity consumption needs are not included in the plans she has drawn up so far to expand access before 2026.

They agreed that there would be technical meetings between the Ministry and each community to explain the situation and the meeting also points to a change in attitude on the part of Ribera, which is now open to incorporating some of the regional requests.. In December, the 64 projects chosen seemed like the final result and when a few weeks ago the first criticisms began at the hands of Ayuso, the Ministry stood by its stance of not authorizing access to supply except for projects that would otherwise lose European funds. A few days ago, he assured that he will take the allegations into account because that is why he opened a period for them to be presented.. The electricity sector “trusts” that Ribera will open his hand a little and his Ministry assures that the allegations are being studied to see which ones can be taken into account.. At the moment there is no date for the Council of Ministers to definitively approve the specific modifications.

Rajoy's limit

Aside from the justified need to have an electricity supply, the sector also believes that the PP, which governs almost all the communities, has seen in this issue an opportunity to oppose the Government of Pedro Sánchez.. Access to electricity supply has become a campaign issue at the other end and days before the formal start of the electoral campaign in Galicia, Ribera walked through Vigo this week with Abel Caballero, the mayor of the city in whose vicinity will install a new Stellantis electric vehicle factory thanks to the 72 million that were authorized in December to create a new electrical substation. Despite this, the Xunta lists up to seven projects that are still in the air.

The struggle between the Government and communities for the supply of electricity will continue for years because in addition to the modification to connect more points before 2026, the process is already underway to plan the electricity distribution network between 2026 and 2030, a period that both electricity companies and administrations consider it too long and rigid for the dynamism they are detecting in investments and industrial projects.

The requirement that more companies and industries be able to plug into the network will also come up against the limit set by law on investment in transportation and distribution networks, which cannot exceed respectively 0.65% of GDP -8,626 million taking the year 2022- not even 0.13% -1,725 million euros following the previous calculation. Curiously, this limit was set by the Government of Mariano Rajoy in the middle of the real estate boom, seeing that many developers demanded access to networks for projects that were later not carried out but in which the investment remained.. Paradoxically too, now it is the PP – regional – governments that have begun to question this limit and ask that it be raised so that the network can satisfy all the expected demand, in this case, mainly to be able to accommodate large companies and industrial projects. .

The next conflict

It is not the only conflict that is on the horizon. Also for the planning of the electrical network between 2026 and 2030 – the consultation period will end at the end of March – some of the communities that have the most wind and photovoltaic parks have already begun to demand that they be the ones that have more access to electricity. network, because they are also the ones that generate the most energy, with projects that also tend to provoke social rejection wherever they are located.

Aragón raised it at last week's sectoral meeting, “the need to bring consumption closer to the places where energy is produced”, as explained in Zaragoza, about an idea that Castilla-La Mancha and Galicia also support and that It leaves communities like Madrid or Catalonia in an uncertain place, very attractive for investment but which, due to the size of their territory and because it is largely protected, consume much more of the electricity – renewable – than is generated in their areas. floor.

Large renewable energy producers see the possibility of having greater access to the grid as a way to benefit the territory that coexists with photovoltaic and wind farms, also within the debate on compensation that Ribera will soon open with communities, companies and interested actors.. Before that, the Ministry of Sustainable Development of Castilla-La Mancha is already talking with the territory and the energy sector to ensure that the next planning of the electrical network acts as “a lever against depopulation with the generation of employment”, with access to electricity that is consistent with the amount produced on its land.

If the electricity 'producing' communities achieve this objective, not all 'consuming' autonomous communities see it as a threat. The new government of the Valencian Community of the popular Carlos Mazón sees in this a way to justify the large renewable deployment that it projects after Compromís stopped it in the previous government of the socialist Ximo Puig. “They put us at home,” said Valencian sources about the opportunities that installing wind turbines and solar panels will also have the coveted electricity supply as a reward.

2023 was a record year for the tourism sector. Spain welcomed 85.1 million foreign visitors, an unprecedented figure in historical series. Never before have so many international tourists arrived in the country in a single year, which demonstrates not only the recovery of the sector after the pandemic, but also its strength.. The growth in arrivals skyrocketed especially in the final stretch of the year. In summer, Spain received just 0.68% more foreign tourists than in 2019, while in the last three months of the year the volume of travelers increased by 11.96% compared to before the pandemic.. This pull outside of the high season outlines the deseasonalization of the activity that the sector aspires to in order to gain stability and guarantee its sustainability.

According to data published this Friday by the INE, 18.7% more international tourists arrived in Spain in 2023 than in the previous year. The impact of the restrictions imposed by Covid prevented us from exceeding 71.7 million visitors in 2022, so we had to wait another year for the sector to fully recover.. In 2019, 83.5 million arrivals were registered, a record number that has been surpassed in the last year with an increase of 1.85%.

The 85.1 million tourists received in 2023 were concentrated, as usual, in the summer months. 34.13% of foreign visitors chose the months of July, August and September to come to Spain, compared to 27.95% arriving between April and June, 21.78% between October and December and 16.14% % between January and April. The predilection for summer matches the traditional appeal of Spain as a sun and beach destination.

“Historically, tourism in Spain has focused a lot on sun and sand, but institutions and businessmen pursue deseasonalization so that the available resources are exploited beyond the high season,” explains Pablo Díaz, professor of Economics Studies and Company of the Open University of Catalonia (UOC). “Many jobs depended on the summer and that created a certain economic unsustainability. We have been working on deseasonalization for a long time, although it is not easy,” adds Diego Santos, tourism expert at EAE Business School.

The tourism boom in 2023 is moving towards this deseasonalization. If the data are observed month by month, at the start of the year the number of arrivals refused to reach pre-pandemic figures. In the first quarter, between January and March, 13.7 million international tourists visited Spain, still 3.52% less than in the same period of 2019.. The surprise of the pre-covid data finally arrived in April, with the stimulus of Holy Week, when 7.2 million foreign tourists visited the Mediterranean country, 1.25% more than in 2019. Growth was repeated in the months of May and July – with increases of 3.78% and 2.62% respectively – although at the end of the summer the records remained very similar to those of the year before the pandemic.

Between July and September, Spain received 29 million tourists last year, 12.93% more than in 2022, but just 0.68% more than in 2019, when it exceeded 28.8 million.. Faced with this timid increase, once the high season was over, the number of visits registered a significant boost after the summer. Between October and December, 18.5 million foreign tourists visited Spain, a figure 11.96% above the 16.5 million travelers welcomed in 2019.. In fact, in the month of December alone, 5.2 million international tourists arrived, which is 20.97% more than before the pandemic, the largest increase comparing month to month.

The potential of national tourism

The final sprint in arrivals is also reflected in hotel occupancy, which in the last two months of 2023 broke records for the months of November and December by filling 52.49% and 49.72% of the beds.. According to the INE hotel occupancy survey, 6.8 million travelers stayed in these establishments in November and 6.6 million in December. More than half of these guests came from within Spain.

“National tourism helps to deseasonalize what international tourism highly seasonalizes,” says Díaz, who points to a change in tourist consumption habits.. “Holidays are no longer concentrated so much in summer, but there are more getaways spread throughout the year,” he adds.. In 2023 as a whole, the number of residents staying in hotels grew by 3.63% compared to 2019

“International tourism is also trying to attract out of season, but it is complicated. We will see if it is not climate change that ends up deseasonalizing it, because British or German tourists prefer to come in spring than in summer,” predicts the UOC professor, who also mentions the new market niche opened by digital nomads to when it comes to attracting foreign tourists outside of the high season.

Diversify to grow

In any case, the deseasonalization of tourism involves diversifying the offer. “Some destinations, by their very nature, have more attraction factors than the sun and beach, with initiatives such as large events, concerts…”, says Santos. “At the country level, the offer has been greatly diversified for years. In fact, marketing has not been done with sun and beach for a long time, we are going to more cultural, gastronomic, business tourism issues…”, he points out, at the same time that he exemplifies the attractiveness of big cities for their varied offer.. “In general, all destinations are aware of the importance of carrying out strategies to depend less on the summer season. “You have to take into account the situation and what can be offered,” he adds.

“On an economic level, the sustainability of the sector involves deseasonalization and at a social level as well, because overcrowding at specific times generates quite a few problems.. The ideal would be to never have very high volumes of tourists, but to always have harmonious numbers,” says the EAE Business School professor. “If we continue to concentrate tourism growth seasonally and geographically, the tensions will multiply.. De-seasonalization is at the same time that geographic diversification is necessary”, agrees Díaz.