The regional governments will have 154,467 million euros from the regional financing system to prepare their budgets for next year. This figure represents an increase of 14.9% compared to the resources transferred from the State to the regional administration in 2023. This was announced on Monday afternoon by sources from the Ministry of Finance and subsequently confirmed by Minister María Jesús Montero, who also announced that the autonomies will be able to close at most with an imbalance in the accounts of 0.1% of GDP. while the State will do so at 2.9%.

Of all the financing that the regional administrations will receive next year, 134,658 million correspond to payments on account for the tax revenues expected for 2024, 8.3% more than what was delivered in 2023. The final tax collection of taxes corresponding to the autonomies is not known until more than a year after preparing the budgets, which is why the Government advances estimated amounts to the communities every year based on the forecasts.

In addition, the regional governments will receive another 20,746 million euros as settlement of the 2022 financing system, a year in which tax collection exceeded all expectations.. These almost 21,000 million are the difference between the collection that the State estimated for the autonomies for that exercise and the result that was finally obtained. With 2022 far exceeding expectations, the settlement for communities is especially favorable this year.

The Ministry of Finance has transmitted this information to the regional governments during the meeting of the Fiscal and Financial Policy Council (CPFF), the forum in which communities and the Government discuss public finance matters.. This meeting had been called last week by the fourth vice president and Minister of Finance, María Jesús Montero, to inform the administrations of the budget stability objectives. That is, the public deficit limits that territorial administrations can legally incur.

On this issue, María Jesús Montero has informed the autonomous communities that they will be able to close at most with an imbalance in the accounts of 0.1% of GDP, one tenth more than what the Government committed to Brussels last April. This reference has not pleased some communities governed by the PP. For example, the Andalusian Treasury Minister, Carolina España, has criticized that the adjustment is much more demanding for them than for the State – whose deficit limit is 2.9% – although the autonomies assume a third of national public spending.

With regard to local corporations (city councils, councils, councils…) they must close their accounts in budget balance. That is, with equivalence between income and expenses. The objective that the Treasury has finally set for these corporations is somewhat softer than the one sent to Brussels, which established a surplus obligation of 0.2 points over GDP.

Negotiations for the haircut will begin in January

Minister Montero, who spoke at a press conference after the CPFF meeting, announced that starting in January the Treasury will undertake a round of contacts with the regional governments to discuss debt relief for the communities.. The Montero department will hold individual meetings with each community to study their situation and establish what part of their debt is the result of the 2008 financial crisis, which will be forgiven.. The work is of great technical complexity and the idea is that the communities can progressively finance themselves again in the markets, even if only partially at the beginning.

The forgiveness of part of the regional debt came to the fore after the investiture agreement signed by PSOE and ERC, which established a forgiveness of 20% of the Catalan public debt (15,000 million) in the hands of the State through the Regional Liquidity Fund (FLA). The text of the pact itself established that this forgiveness will be extended to all communities, whether or not they have debt with the State, although it did not specify under what formula.. Something that has not pleased the majority of common regime communities, including Castilla-La Mancha, in socialist hands.

Montero denies bilateral meetings with Catalonia

Montero has also taken the opportunity to deny that the Treasury has had any exclusive meeting with the Generalitat to discuss the financing model of this community.. “There has not been any bilateral meeting on the regional financing model in Catalonia,” Montero concluded.. The Catalan Minister of Finance, Natalia Màs, had been absent from this Monday's meeting, alleging that the Government already has open bilateral negotiations with the State to agree on a new singular financing. A comment that has upset the majority of regional governments, including also that of Castilla-La Mancha, in the hands of the PSOE. The 12 autonomies governed by the PP have presented a common front to the Treasury: they have demanded a reform of the financing system, which has been pending since 2014, and they have criticized the Government's favorable treatment of Catalonia.

The Minister of Finance has also highlighted that all the autonomous communities have once again received the largest financing in their history with this Government, despite the pandemic and the presence of a war on European soil.. Funding that, it is important to remember, comes almost entirely from the collection of taxes that legally correspond to the regional governments.

In this sense, María Jesús Montero recalled that the central government assumed the entire fiscal impact of the pandemic, which amounts to 30,000 million euros.. Likewise, he added that the Treasury has forgiven communities and municipalities for the negative settlement of the system in 2020. That year, tax collection collapsed due to the pandemic and the communities received payments on account that were much higher than what would have corresponded to them. The Government, instead of claiming these amounts in that year's settlement, forgave them to the autonomies.

The second meeting called by the Ministry of Labor with unions and employers to address a new increase in the interprofessional minimum wage (SMI) has ended again without agreement and without a new call date. The unions have pointed out that if an agreement is not reached, it will be the Government that will finally decree a percentage increase so that on January 1, 2024, the affected workers know how much they will earn.

At this Monday's meeting, the ministry led by Yolanda Díaz proposed a 4% increase to unions and employers, which would place the amount in 2024 at 1,123.2 euros per month for 14 payments, compared to the current 1,080 euros. just as he had already anticipated he would do.

This was reported to the press upon leaving the second meeting by the confederal secretary of Trade Union Action of CC OO, Mari Cruz Vicente, and the vice-secretary general of Trade Union Policy of UGT, Fernando Luján, who consider that this approach made by Labor ” comes to assume” the request of CEOE and Cepyme, which had proposed an increase of 3%, with the possibility of adding up to 1% in case of deviation from inflation.

During the meeting that took place this Monday, the unions have indicated that an agreement has not been reached because the employers have not wanted to “bring closer positions” and both parties have remained the same: the CEOE with its proposal to raise 3% and the unions with that the increase reaches 60% of the average salary and that this increase is high enough to compensate for the impact of inflation on the most basic products.

In addition to proposing a 4% increase, Labor has committed to studying the establishment of bonuses in Social Security contributions for the rural sector, according to ministry sources consulted by Europa Press. This is a measure demanded by the CEOE, which has specifically requested that this bonus be 20%, but which the unions oppose.

The ministry has also shown its willingness to study the impact of some public contracts affected by the increase in the SMI to transfer it to the competent ministries.. The employers have been asking for the SMI to be indexed to public contracts for some time, a demand with which, a priori, the unions agree.

CC OO and UGT have recalled that this “is not a decision” solely for Labor, since the Ministry of Economy and the Ministry of Finance are the competent ones, so Labor have pointed out that first “they will have to talk to each other.”. In any case, they have described as “not a priority” indexing the increase in the SMI to public contracts and have indicated that this proposal put forward by the employers, and with which the unions expressed their agreement at the first meeting, should not condition the rise of the SMI.

For their part, sources from the CEOE have indicated to Europa Press that at today's meeting they were informed of the Government's proposal and that their organization has once again put on the table the approaches that led to the first meeting of the SMI. These, the same sources have recalled, have to do with the need to index public contracts to the SMI and with the evolution of this minimum income “going hand in hand” with the general framework of collective bargaining.

For her part, the second vice president of the Government, Yolanda Díaz, assured this Monday that the Executive is “close” to reaching an agreement with unions and employers for the increase in the SMI of 2024 “because the claims” of the social agents are not “very far away.” “I am fully convinced that for the good of the country we will be able to achieve it. “We are very close,” he noted.

The great financial crisis of 2008 left a deep wound in the Spanish economy that has never fully healed for some groups.. One of the most obvious examples is that of young people, whose salaries have grown even less than their pensions have increased since the outbreak of the great recession.

In 2022, the average salary of a young person between 16 and 24 years old amounted to 1,315 euros per month in 12 payments, 12.1% more than in 2008. In the case of young people between 25 and 34 years old, the average salary last year was 1,850.55 euros per month, 14.2% more than at the beginning of the crisis, according to the latest employment salary decile statistics. main one that the INE recently published.

However, the accumulated revaluations of pensions in that same period reach 14.6%. In that same period, the average retirement pension has increased much more – from 814 euros per month in 14 payments in 2008 to 1,254 in 2022 (54%) – but this is largely due to the effect of entering the system of retirees with higher pensions, not only to the revaluation of benefits.

Both young people and pensioners have suffered a significant loss of purchasing power since 2008. Between 2008 and 2022, consumer prices increased by 25.5%, while the salaries of young people between 16 and 24 years old grew by 12%; those of young people between 25 and 34 years old 14% and the revaluation of pensions accumulated 14.6%. This implies that while pensions have lost 10.8 points of purchasing power, young people's salaries have lost between 11 and 13 points.

However, the difference in loss of purchasing power between young people and pensioners will foreseeably increase in 2023.. The reason is that, while pensions have been revalued by 8.5% to maintain their purchasing power, salaries have not enjoyed the same protection. The problem is that we cannot know how much salaries have been devalued this year because the salary statistics are a year behind the present time.

The effect of the crisis, added to the entry into the pension system of workers with more stable and better-paid careers, has caused a striking effect. And the average retirement pension is now higher than the salary of the youngest. In 2008, the average salary of the population between 16 and 24 years old was 1,173 euros per month in 12 payments, while the average retirement pension prorated to 12 payments was 950 euros per month.. Last year, the retirement benefit averaged 1,463 euros on 12 payrolls, while the salary of the youngest was 1,315, 150 euros less per month.

Two different crises

The financial crisis hit younger generations and pensioners very unevenly. Between 2008 and 2015 hundreds of thousands of young people lost their jobs and many others suffered drastic salary cuts. In the worst moments of the crisis, the average salary of the population between 16 and 24 years old was 12% below the 2008 level. In the case of citizens between 25 and 34 years old, the drop was 7%. Furthermore, the collapse in wages was much greater among young people with lower salaries. At the lower end of the youth salary spectrum, remuneration fell up to 21% below the pre-crisis level.

While the younger generations did not recover the salary level of 2008 until 11 years later, the average salary of the rest of the age groups never fell below the pre-crisis level. The only exception was those over 55 years of age, who suffered a much slighter decline.

Young people's salaries did not begin to gain traction again until 2019, thanks to increases in the SMI and the rebound in employment. In this period of time, the younger generations closed a good part of the purchasing power gap that opened with pensioners. However, the strong inflation that affected the economy in 2022 truncated the recovery of purchasing power for all employees, including young people.

The history of pensioners is different. Although the group also suffered the impact of the crisis, they never saw their income cut as happened to young people or pensioners in other southern European countries.. During the years of the crisis, pensions rose less than inflation on five occasions, which led to angry protests from the collective.

The fact that pensions were not nominally reduced turned these incomes into a lifeline for millions of families who did see their income cut. In a period in which one in four Spaniards who were actively looking for work was unemployed and in which millions of workers suffered salary cuts, pensioners became the breadwinners of a not insignificant part of the country.

Different realities, different problems

Furthermore, it must be taken into account that the pension system hides very different realities. While there are a large number of pensioners who receive benefits of more than 3,000 euros per month, at the same time there are 40% of people whose benefits do not exceed the minimum wage in 2023.

Beyond that, pensioners and young people face very different problems and their conditions obey different dynamics.. One of the keys is housing. 89% of those over 65 years of age live in a home they own and, in most cases, these are properties that no longer have any burdens. On the other hand, almost half of young people between 16 and 29 years old live in rent, a market in which prices have risen drastically in recent years.

Likewise, it should not be forgotten that the working and salary conditions of young people depend on the labor market.. Whether young people's salaries are higher or lower is determined by companies depending on the economic situation. On the contrary, the revaluation of pensions is determined by the Government, based (theoretically) on the resources that the State has.. However, it must be taken into account that the income of the vast majority of retirees depends entirely on the pension system.

Spending by employers to compensate workers continues to grow for the ninth consecutive quarter, but it does so at a slower pace. According to the Harmonized Labor Cost Index (ICLA) released this Monday by the National Institute of Statistics (INE), between July and September the cost of hours worked increased specifically by 5.4% compared to the third quarter of 2022, a rate interannual more than one point lower than that registered between April and June. The data represents the first moderation in two years of increases, which could point to a change in trend, despite the fact that inflation continues to be the focus of businessmen and workers.

The annual rebound recorded in the ICLA between the months of July and September adds up to a new quarter of increase in labor costs. This is the ninth consecutive increase, since it embarked on its particular upward path in the second half of 2021.. This upward path peaked in the second quarter of 2023, when the labor cost per hour worked grew by 6.5%, that is, its largest year-on-year increase since the second quarter of 2020, in the midst of the pandemic. The moderation of the increase to 5.4% in the third quarter of 2023 opens the door to a change in trend in the evolution of labor costs. However, it is still the second sharpest year-on-year increase in just over three years, surpassed only by that of the previous quarter.

The increase in labor costs in the third quarter has not been homogeneous in all sectors. The largest increases were recorded in real estate activities, information and communication, and arthritic and entertainment activities, areas in which the expenditure disbursed by employers for each hour worked grew respectively by 13%, 8.2% and 7.8%.. On the other hand, extractive industries, energy supply and financial and insurance activities were the sectors where labor costs increased the least, with year-on-year increases of below 3%.

The ICLA reflects the behavior of the expenses borne by companies when employing their staff, so it includes not only the salaries of workers, but also social contributions, vocational training costs and taxes related to employment, discounting subsidies perceived by companies. According to provisional data published this Monday, the rebound in labor costs rises to 5.7% when extraordinary payments and arrears are excluded from the calculation.

In the absence of the INE releasing the average amount of said labor costs next week, for the moment the available data indicates that the salary cost increased by 4.6% in the third quarter compared to the same period in 2023. , while the rest of the costs rose by 7.8%. This means that an important part of the increase in labor costs does not correspond to the increase in salaries received directly by workers at the end of the month.

According to the collective bargaining statistics of the Ministry of Labor, the salaries agreed in the agreement rose on average by 3.41% until September, a proportion slightly below inflation, which in the ninth month of 2023 rose to 3.5%.. The increases agreed in the agreement have increased slightly in recent months until reaching 3.49% in November. Compared to the ground covered to date, the Randstad Research think tank expects salaries to rise between 2% and 3.5% in 2024, according to a salary trends report published this Monday.

Regarding the second quarter of 2023, in the last three months for which data is available, the labor cost per effective hour of work has increased by 3.1% between July and September due mainly to the decrease in the number of hours worked coinciding with Summer holidays. By components, the salary cost grew by 1.3% quarterly, while the remaining costs increased by 8.6%.

In fact, the quarterly increase in labor costs per hour worked is common in the summer months, due to the seasonal decrease in the volume of hours worked.. This increase in costs by reducing working hours is one of the arguments put forward by detractors of the reduction in the working day to 37.5 hours per week agreed by PSOE and Sumar in their government agreement, although there are also those who defend that working fewer hours would improve work-life balance and enhance productivity.

The EU is negotiating a new package of energy taxes that includes a tax on airplane kerosene and the Spanish airlines are demanding that the Government veto such a possibility in Brussels, which would contribute to raising the price of tickets and could make Spain would lose up to 4.5 million tourists a year, who would instead prefer nearby but cheaper destinations like Turkey or Jordan.

The president of the Association of Airlines (ALA), Javier Gándara, warned this Monday of the pernicious effect that, as he said, the new energy tax that the EU has been negotiating for years would have, with a greater negative impact, in addition, in countries like Spain, which are recipients of tourists.

“They would be English or Germans who, instead of going to Spain, would go to Turkey, Egypt or Jordan”, whose airline companies would not be taxed with this new fuel tax, he warned at the III Climate Summit in the Aeronautical Sector organized in Madrid by the Official College of Aeronautical Engineers of Spain (COIAE). As explained, the ALA commissioned a report from Deloitte that calculates the civil aviation measures prepared by the EU to decarbonize the sector would mean the arrival of 12 million fewer tourists per year in Spain – in 2022, there were 71.6 million. -, of which 4.5 million would change destination due to a price increase due to the future tax on kerosene. Other factors that Gándara has mentioned as causing a price increase are the objectives to introduce 'green' fuels in airplanes, for which the ALA asks for “aid” like those that governments are giving in countries like the United Kingdom or the United States. United, because at the moment it costs “between three and six times more than conventional kerosene.”

Break the unanimity

The creation of a new kerosene tax is part of one of the 12 packages into which the European plan to decarbonize the economy is divided – the well-known Fit for 55 -, which consists of a directive on energy taxes, which provides for a new taxation for this sector, based on environmental efficiency, on taxes on new products and also treatment of the aviation and maritime transport sectors, which until now were left out of these issues.

Specifically, what it is about is setting a tax on kerosene used by airplanes and which will become a reality when a directive that has been negotiated for years is approved without an agreement being seen at the moment, unlike other aspects of the Fit for 55 on which the Twenty-seven have achieved a consensus, such as the reduction of C02 emissions in cars and vans or, more recently, on methane emissions.

For the energy tax directive to be approved, it is necessary that there be unanimity, that is, that the 27 European governments vote in favor and that is where the ALA has seen the opportunity to demand – still without success – that the Government veto the initiative , given that with a single vote against it it would not be possible to agree on it and, therefore, roll back the tax on kerosene that the airlines believe would especially harm countries like Spain, recipients of international tourism.. According to sources in this sector, others like Germany would not have much to lose because their tourists would only have to choose another non-EU destination where this tax would not be applied.

At the moment, ALA's request for Spain to apply its veto has not been heard by the Government, in full reflection on the design of the tax on energy companies that it created due to the energy crisis.. The negotiation of this directive in Brussels corresponds to the Ministry of Economic Affairs, although sources in the sector recognize that the Ministry of Ecological Transition does not want to give up the new tax, to discourage the use of fossil fuels, in this case in aviation.

The ALA warns that taxing the kerosene that moves airplanes would affect the price of the ticket, which, if raised, could make tourists from other European countries opt for other destinations.. Furthermore, the increase in ticket prices would put at risk the “democratization” of air transport.

Gándara has asked that “we not take away the achievement of aviation, that today flying is within the reach of all budgets.”. Don't let it go back to being something for the very rich like it was not too long ago.”. “There are movements that proclaim that you should be ashamed of flying. I think it is good and that it has improved the lives of millions of people, what we have to do is make sure that it remains affordable and increasingly sustainable,” added the general director for southern Europe of the EasyJet company. .

Sustainable fuels

The ALA has participated in a debate table on the decarbonization of air transport together with representatives of Enaire, Aena and the General Directorate of Civil Aviation of the Ministry of Transport, where the transition from fossil fuels to new fuels has also been the protagonist. sustainable, the so-called SAF, for which the international community has just set a series of objectives that will force countries like Spain or the rest of the EU to introduce them more quickly.

At the moment, SAF do not represent more than 0.2% of the fuels used in aviation, which accounts for 3% of global greenhouse gas emissions but is a sector with a complicated transition towards zero emissions. Prior to COP28 in Dubai, the countries of the world agreed on an aviation decarbonization target of 5% by 2030, as a preliminary step to net decarbonization in 2050 (that is, an end to emissions that cannot be offset).. That goal means using 7% of SAF, unevenly, with more burden for countries with technologies to do so, so that those in the EU will be responsible for up to 10%, an effort that, according to the airlines, could also lead to an increase in ticket prices if there is no public support to make this transition.

“One of the great windows of the SAF is that they no longer depend on you having fossil fuels,” Gándara pointed out, alluding to something that happens with all renewable energy generation, which makes Spain a potentially leading country for the sun. and the wind. He pointed out that “between 30 and 40” SAF production plants could be created here, which would create tens of thousands of jobs.

However, he has warned that these renewable energies still have time to fully develop and that this regulation be “complemented with aid such as other countries, the United Kingdom or the United States, at least for the escalation phase and for the transition to be made.” as orderly as possible.”