Díaz and the looting of the Government with wages

“Don’t wanna be your slave twenty-four hours a day.” Mick jagger.

Yolanda Diaz He has never created a company in his life, nor paid a payroll out of his pocket, but he happens to know exactly how much companies should charge and pay.

Costs skyrocketing? They demand that companies not raise prices and that they lose… but that they pay more taxes.

Do taxes shoot up work? They require you to pay more salaries even if they keep almost 35% of what you earn.

And on top of that, they blame you for paying few taxes.

For socialism, everyone has a margin except them.

If it’s a wage issue, why don’t you lower taxes on work? A salary of 1,000 euros is more than 1,800 gross.

If it’s a wage issue, why don’t you lower taxes on work?

Spain was the European country in which the tax pressure grew the most during the pandemic. How could this have happened with a million fewer people listed and 100,000 fewer listed companies? Exploding what’s left. The tax hack has been triggered in addition to charging taxes on the misnamed “aid”.

This is especially serious because tax collection has skyrocketed even though the tax base has worsened, that is, we have been suffocated with taxes that we have overcome the crisis while the government not only maintained, but increased, all political spending, duplicities and unnecessary.

Spain was also the European country with the highest deficit despite squeezing captive taxpayers like never before. The weight of spending on GDP increased 10 points in the midst of the pandemic, and not a tiny part of that increase was aid to executed companies.

Spain also closed 2020 with the lower level of aid to companies and the self-employedexecuted Really. Let’s not forget that announcements were made –such as the misnamed direct aid- that were never fulfilled. And let’s not forget that the ERTE is not an aid from the state to the companies but from the companies to the state, since it is much cheaper for the public coffers to have a person in an ERTE than an unemployed person.

The latest AIReF forecasts show a rebound of just 2.6% in the first nine months of 2021less than half of what the government expects for its fake budgets.

We already warned last week that the macro table for growth, oil prices and inflation were laughable, a completely invalid macro table and science fiction revenues that, despite everything, leave a structural deficit – the one generated whether we grow or not – that it will be the highest in the European Union in 2023 on your own estimates.

The fiscal and inflationary clamp to companies and citizens impoverishes everyone and it is intolerable.

The companies face a rise in the prices of their inputs –increase in costs- that exceeds 16%. For companies, energy has risen more than 31%, non-durable consumer goods 26% and average costs between 15 and 20%. A ruin in a country of SMEs and for the manufacturing sector that manufactures components.

Additionally, with the rise in the minimum wage, the cost of hiring and the minimum contribution bases have increased. For an average company, 66% of their costs – wages and energy – have ballooned far beyond what they can pass on to their customers. And Yolanda Díaz arrives and tells them in a soft voice to get annoyed and pay more salaries so that she steals even more in indirect and direct taxes.

The ‘hachazo’ to the self-employed is even more bloody because they have the shamelessness to say that nobody cares to pay 200 euros more a year. Tell it to the hundreds of thousands of self-employed who cannot make ends meet, to whom all taxes have been raised and on top of that the penalties for delay have been maintained, a real robbery.

The interventionist government plunders via tax and with the inflationary tax and then, in a mellifluous voice, he tells you that he is going to help you with your own money and that companies pay more and sell below the increase in costs.

Meanwhile, they continue to fatten the extractive and confiscatory machinery.

And they have the shamelessness to ask for “empathy”.

Movistar store in the Gran Vía shopping center in Hortaleza.

High inflation would restrict the number of buyers in the real estate market

Idealista foresees a stabilization of the real estate market by 2022, with rises below the CPI

Protected housing in Madrid.

“One of the aspects that can modify the behavior of the market is the high current inflation and foreseeably in the medium term”. This is one of the main conclusions that Idealista estimates for the next year in the real estate market.

“The increase in the cost of life would suppose a decline in the saving capacity of Spaniardsas well as a lower financing capacity (both due to lack of savings and due to meeting installments with reasonable debt), which would restrict some buyers in the purchase market”, they add.

However, from the portal they describe as a “great unknown” the fact of whether the inflationary period that is now being experienced is transitory or will have second-round effects, by moving to salaries above what was expected. This could make high inflation permanent.


From Idealista they consider that “it does not seem likely” that the ECB will raise rates this year, due to the extremely high level of debt of European countries, and possibly tow the market. “Even so, a scenario of a rate hike of 1% or 2% would not have a significant impact on citizens“, they add.

Looking ahead to next year, they foresee “a scenario of stabilization at current levels, without double-digit growth in most indicators, just as it has happened this year, and with price rises below the CPI“.

With regard to purchases, they will remain above 550,000 units per year. Also, mortgages may hit a stalemate, or a slight drop. “The stabilization of purchases and sales could allow a replacement rate in the second hand that reduces the current tensions and maintains prices during the coming quarters,” they indicate.

The portal indicates that, in this 2021, there has been a “euphoric pattern” in the real estate market. Here are the INE data: increases of up to 40% in sales (exceeding pre-pandemic levels) and year-on-year growth of over 60% in mortgages.

In addition, Idealista has recalled that a significant volume of families change entities to take advantage of the historically low rates currently on the market. “Despite the price war, the banks have not substantially modified the risk criteria, and the effort ratio of new mortgages remains below 35%”. Of course, they do not believe that these data correspond to overheating but that “they are at the reasonable values ​​that they would have reached if the pandemic had not taken place.”

About him stock real estate, from Idealista they have given as an example the different scenarios that live Madrid and Barcelona to show the differences. While in Madrid the offer that a person looking to buy a home in December 2021 finds in Idealista is 14% lower than it was a year ago, in the city of Barcelona they find 3% more.

“In fact, if we compare the data with the minimum of the pandemic in May 2020, the offer in Madrid is only 7% higher, while in Barcelona it grows up to 30%”, he recalled.

Regarding the price, remember that this continues to grow below 5% year-on-year (3.5% in the month of November). The growth in Madrid is even lower (0.2%) and in Barcelona there are still falls (-3%).

roller coaster for rent

The rental has experienced a real “roller coaster” with the outbreak of the pandemic. “In summer we live in an unprecedented situation with a stock which reached highs in early summer, increasing by 137% compared to the pre-coronavirus scenario in Madrid and 107% in Barcelona. When normality begins to settle in July of this year and most of the Ertes end, teleworking becomes a hybrid formula, students and tourists return to the cities, supply begins to fall rapidly, 55% less in Madrid and 68% in Barcelona”.

Madrid has 6% more supply than before March 2020, while in Barcelona it has been reduced by 34%. “Possibly due to the regulation of the rental market in Catalonia and the transfer of homes to the sales market, Barcelona has regressed to the same level of supply it had in 2017while in Madrid it remains in the line in which it would have been if there had not been a pandemic ”, they explain from Idealista.

Regarding rental prices, Idealista has indicated that the situation was similar, since while the market had more supply than ever, prices fell sharply. “In the month of April, prices fell by 16% year-on-year in Barcelona, ​​while in May in Madrid the drop was 13%. The reduction in stock has caused the latest data for the month of November to show a drop of only 1.6% in Barcelona and 4.9% in Madrid, although quarterly increases are already beginning to be observed in both markets”, he stated.

The Housing Law will strangle the rental offer and increase the number of flats for sale by 30%

The transfer of apartments for rent for sale is already a reality in Barcelona. And it could be extrapolated to the rest of the national territory.

A home for sale.

Two people are looking for a flat to buy in Madrid and Barcelona. Both have been doing it for a year. And they do it through Idealista. Unfortunately for those who are doing it in Madrid, the offer is 14% lower than it was a year ago. However, whoever searches Barcelona finds that they have 30% more options at their disposal.

“The explanation for these differences can be found in the greater dynamism of the capital, as well as in a transfer of rental product to sale in Barcelona”, they indicate from the real estate portal. The latter is due to the legal changes that have been in force in Catalonia for 15 months.

The Catalan Rental Price Containment and Moderation Law has caused the transfer of rent to sale once the lease contracts conclude. A situation that could be extrapolated to the entire national territory if we take into account that a state law with similar content is on the table.

Of course, the Madrid buyer will win over time. While in Madrid prices continue to rise gradually, in Barcelona they have been accumulating setbacks since 2018. In June of this year, the drop in the sale price in Barcelona was 4.2% compared to the growth in prices in Madrid.

“One of the factors of this fall has been the regulations of the Barcelona City Council in terms of housing. Together with the economic uncertainty of families and the high prices of 2018, they have caused many owners to decide to take their home out of the rental market and put it up for sale”, they point out from Colliers.

rent increase

The fact that there is less rental supply together with other factors included in the Housing Law will raise the rent in 2022. Those other factors are the increase in taxation, longer-term rentals, rent freeze and price intervention . To this we must add the increases in inflation and the cost of materials.

yesand is creating the breeding ground for, in the year 2022, rents experience a price increase of around 5%”, point out from the Rental Negotiating Agency (ANA). This rise would affect all those homes offered for rent on the market, where the rise in the CPI (5.6% annual rate of the IPCA for November) would have to be added, which Already is causing many rents, in their annual review, to become more expensive.

Panoramic view of Barcelona

Panoramic view of Barcelona

We estimate that this rise in rental prices is going to occur without the future Housing Law, which is currently being processed, being able to prevent it”, affirms José Ramón Zurdo, general director of ANA. And he clarifies: “Pwe rehearsed that the measures announced in the draft may be the trigger for the rise in rental prices, by causing a strangulation of supply”.

vlet’s forget to the two characters looking for a flat. Now to rent. In this case, the one who emerges victorious is the resident in Madrid. Because now has 6% more supply than before March 2020. In the case of the individual from Barcelona, ​​this offer has been reduced by 34%.

They are data from Idealista that once again highlights that this is possibly due to the regulation of the rental market in Catalonia and the transfer of homes to the sales market. “Barcelona has fallen back to the same level of supply it had in 2017, in the environment of the 6,500 offered”, they point out from the real estate portal. “In Madrid it remains in the line in which it would have been had there not been a pandemic,” they add.

And the rental prices? In April they fell 16% year-on-year, in Barcelona, ​​and in Madrid, 13% YoY In May, According to Idealist The portal has verified that there has been a particular ‘return to the tortilla’ due to this reduction in stock in Barcelona by passing 30% of the apartments that were for rent to sale. In November, the fall in Barcelona was 1.6% year-on-year, while in Madrid it reached 4.9%.

camouflage attempt

The reduction in the number of rental homes is already being transferred to prices. In Barcelona, ​​and according to Idealista, there has been a quarterly increase of 2.4%. In Madrid, where rental housing has not yet been transferred to purchase, the increase is 0.2%.

The Rental Negotiating Agency points out a series of measures that can affect this possible increase in rental prices. Increase motivated by the contraction of the supply that will cause the future Housing Law.

View of Madrid with the four towers in the background.

View of Madrid with the four towers in the background.

Among them, the general increase in the taxation of small landlords in their income statements by ten points, going from the current deduction of 60% to 50%. That, being the houses in stressed areas or not.

“This increase in taxation has been tried to camouflage by the Government, announcing benefits for landlords that could reach 90% or 70%, when these deductions will be residual”, they nuance from ANA.

In addition, lessors will have to put up with longer lease periods. Thus, it may be up to eleven years, for individuals, and 13 years, for companies. Without forget the freezing of rents for landlords natural personsand income intervention for large legal entity holders “for very long periods of time”.

For the moment, the Council of Ministers has taken into consideration, in first reading, the Preliminary Bill for the Right to Housing. The Government intends to send this text to Congress before the end of the year.

The Minister of Transport, Mobility and Urban Agenda, Raquel Sánchez, has placed the final approval of the text in the second half of 2022. Even so, certain points would have their particular moratorium. For example, the one referring to the price limitation for large legal entity holders: it would be 18 months, so it would not apply until 2024.

The PNV lowers the ‘decree’ against the electric companies to a ‘decree’

The Government will moderate the application of the ‘energy decree’. They will stop attacking the “electric companies” for their “extraordinary profits” derived from the rise in the price of energy, if they meet certain requirements. If they show that they are “good guys” and make their supply contracts reasonable for consumers.

The first thing is to clarify that are not extraordinary profits per se. Accounting, that figure responds to those achieved by a company in operations outside the object of its business. For example, if a food or energy distributor makes a profit by selling a building it owns, that profit shows up in its income statement as “extraordinary profits.” What is qualified as extraordinary profits of the electric companies are not such. They are profits derived from the current operations of these companies. Greater than in other circumstances, but ordinary.

So in the event that the Government wanted to expropriate these “ordinary benefits” it would have to calculate them. Not as extraordinary, but as supplementary ordinary and it would not be clear what they are. Something that would lead to litigation, which could end up in court. Technically the discussion is complex. Better not get into trouble because as the legal saying goes: A bad settlement is better than a good lawsuit. The quick thing would be to reach an agreement between the Treasury and the electric companies. What would probably be a fact of image and propaganda rather than something significant.

In addition, the Government does not say How will you check the “reasonableness” of the contracts? to consider that the electric companies have behaved properly. Absence that allows us to suspect that what the Government has said to the electricity companies is that they are not going to demand what the Decree says.

It will be enough for the energy companies to make some gesture for the Decree to enter a dead end in relation to those improperly called “extraordinary benefits”. That would also be an agreement that would avoid lawsuits against the Government.

In this way, the Government and electricity companies mutually benefit. The Executive with the image that seems to defend consumers. The electricity companies maintaining the benefits that allow them to remunerate their shareholders; both because of the dividends that they are going to be able to distribute, and because of the increase in the stock market price of their shares, because investors see the ghost of the controlling government disappear.

It is clear that United We Can is up to date to demonstrate that it is “the guarantor” in the Government of the real left. So it would not be strange for him to raise his voice in a few weeks when he sees that nor does it lower the electricity bill substantially, nor does the Government mess with the electric companies.

Neither Yolanda Díaz nor Alberto Garzón will be able to shout much. Why? Because this Sánchez-Díaz Government (which tilts Díaz-Sanchez) needs the 2020 Budgets to be approved and this is where the PNV comes into play with its deputies in Congress.

This Sánchez-Díaz Government (which tilts Díaz-Sanchez) needs the 2020 Budgets to be approved and this is where the PNV comes into play

It is the PNV that is going to reduce the decree of the electric companies to a decree. The reader will wonder what benefit Basque nationalism derives from doing this?

It cannot be affirmed that there is a direct relationship in this. However, there is a coincidence that if it were perverse it could be highlighted. The fiscal headquarters of the most important electric company, Iberdrola is in Bilbao. Therefore, it pays taxes to the Provincial Treasury of Vizcaya. One of the three Haciendas that feed the Budget of the Basque Country.

The PNV, which governs in coalition with the PSE, is interested in Iberdrola continuing to be listed in Vizcaya; given the precedent of the companies in Catalonia that left. Iberdrola, provided that the parliamentary situation is the current one, is interested in having its fiscal headquarters in Bilbao; to have a party like the PNV as an interlocutor, which in addition to being nationalist is in favor of the free market, with the nuances that correspond to its Christian Democrat component. A PNV that has the key to many parliamentary issues by completing the majorities.

So PNV and Iberdrola support each other financially and politically. That’s why what seemed like an ‘Electric Decree’ is going to remain a ‘little decree’ (in lowercase). It will be one of the conditions for the PNV to vote on the 2022 Budgets that the Government so badly needs.

*** JR Pin is a professor at IESE.

Forecast for Wednesday, January 13.