The Socialist Party of Spain and the Sumar political movement have announced a “programmatic agreement” for a new “progressive coalition government”. In doing so, the two groups have formalized the formula that the socialist leader and outgoing Prime Minister Pedro Sánchez had already presented to voters in the election campaign before last July’s elections as a political project for the new legislative period.
This is a line of continuity with the legislative period that has just ended, since in this case his party governed with Unidas Podemos, which from this year merged with Sumar, a movement launched by the Deputy Prime Minister and Minister of Labor Yolanda Díaz, together with others left formations.
However, to be confirmed as prime minister, Sánchez will need the support of several other parties, including the Catalan independents Esquerra Repubblicana and Junts per Catalunya, groups with which political negotiations are continuing under the radar. According to the provisions of the constitution, if the king does not receive the confidence of parliament by November 27, he must dissolve the chambers and call new elections.
“This government agreement will be valid for a four-year legislative period,” we read in a joint statement, and “will enable the country to continue to grow sustainably and create a high-quality labor market through policies based on social justice.” Climate and aims the expansion of rights.
Shortening weekly working hours “without salary cuts”, an expansion of paternity and maternity leave, a “fair” tax reform that “ensures that banks and large energy companies contribute to public spending”, and a renewed increase in the minimum wage are some of them most important government commitments that the Socialists and Sumar have made together.
Specifically, the aim is to reduce weekly working hours from 40 to 38.5 hours per week in 2024 and to 37.5 hours in 2025. From 2025, “a table will be drawn up with the social partners to evaluate and continue the results of the reduction.” Make progress in shortening the statutory working day, taking into account the characteristics of the different areas of activity, the evolution of productivity and the economic circumstances.”
The agreement then proposes to review the current extraordinary taxes on the additional profits of banks and energy companies in order to “adjust them and keep them in force after the expiry of their current period of validity”: this is what we read in the document with the details of the agreement, which were expected by some Iberian media. Currently, these “extraordinary taxes”, introduced in 2022 in response to the crisis related to the consequences of the Russian invasion of Ukraine, apply for a period of two years (referring to the 2022 and 2023 financial years).
The current special tax for banks affects credit institutions with profits from commissions and interest to customers of more than 800 million euros per year and refers to the “sum of interest margin and active and passive commissions” with an applicable percentage of 4.8%.
For energy companies, the tax is 1.2% of the net amount of annual turnover in Spain. The aim of PSOE and Sumar is to ensure that both sectors “continue to contribute to tax justice and social welfare” in the Iberian country.
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