In the middle of the debate on the fiscal harmonization that the Government of Pedro Sánchez is determined to impose at least on the taxes assigned to the autonomous communities to end what it considers to be unfair tax competition by the Community of Madrid, the governor of the Bank from Spain, Pablo Hernández de Cos, has left this Tuesday in defense of the margin of maneuver of the autonomous communities to set their own taxes by ensuring that this space of discretion “is not only possible, but also desirable.” He did so in Barcelona, within the framework of a conference at the Cercle de Economía, during which he expressed his opinion that the ability of autonomous communities to maneuver to set taxes not a problem for the Spanish market unit and that tax harmonization only needs to be ensured in tax figures that have the most relevant potential distorting effects on the activity, such as Corporation Tax.
“There are taxes in which it can be dangerous from the point of view of the market unit to decentralize them (a list in which he has only mentioned Corporation Tax), but there are others in which the margin of discretion on the part of the communities autonomous is not only possible but also desirable. ” Without referring at any time to the open controversy between the Government and the Community of Madrid on account of the possible harmonization of property, inheritance and donation taxes, which the Minister of Finance, María Jesús Montero, is determined to address, the governor The Bank of Spain recalled that fiscal decentralization was raised in its day under the principle of delegate to the autonomous communities those tax figures that had less chance of ‘uncoordinating’ the normal operation of the economy and that within this space the regulatory capacity of the autonomous communities is even positive to reinforce the link between the income they manage and the expenditure they execute.
In this sense, he also underlined that until not long ago there was a fairly broad consensus among financers on the fact that the autonomous communities handled a very significant volume of public spending and, however, had limited regulatory capacity. In any case, he has made it clear that in his opinion this regulatory capacity of the regional governments does not pose a threat to market unity.
A market unit that has also mentioned when listing the structural reforms that Spain must face in the coming months and that from their point of view should begin to be implemented now. Hernández de Cos has admitted that there is a possibility that any of these reforms that need to be addressed are unpopular“But perhaps it is not unpopular to maintain an economy with low growth, high unemployment and low productivity,” he reflected.
Among those unpopular reforms that the Executive should activate, he has mentioned the pension reform, of which he has said that he has to guarantee greater intergenerational equity, and also the labor reform, which should attack the high temporality of the labor market with measures, he has said, such as the establishment of an employment contract with increasing dismissal costs to favor the entrance door to employment and subsequently guarantee its stability.
The risks of digitization: telework, virtual classes …
Hernández de Cos has assured that among these reforms should also be a greater digitization of the economy, but has warned of some of its risks. It is the case of telecommuting. “There is beginning to be evidence that teleworking is not innocuous for productivity and in fact can generate a reduction in it”, in the event that companies do not use the appropriate means and guarantee sufficient training for staff.
But it not only happens in the labor market, it also reaches the educational system. The governor of the Bank of Spain has also warned about the unwanted effects of the establishment of non-contact classes, which according to the data handled by the agency can contribute to exacerbate situations of inequality in the school environment.
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