No concession despite criticism: The Spanish left-wing government, Friday, defended its extraordinary bank taxes planned for 2023 and 2024, ruling out any negative risks to the Spanish economy, despite the serious doubts expressed by the Spanish government. European Central Bank (European Central Bank). The Spanish Prime Minister, Socialist Pedro Sanchez, has confirmed himself that he does not intend to waive this tax, which is due to enter into force at the beginning of next year.
“We will study the report (from the European Central Bank), but the Spanish government maintains the roadmap for creating this important tax“, he stated during a press conference at the conclusion of the Spanish-Portuguese summit in Viana do Castelo (northern Portugal). In an advisory report published on Thursday, the European Central Bank (ECB) warned of “Possible negative consequences for the sectorBanking from this tax, it is supposed to bring three billion euros within two years into the Spanish public finances. Should “to guarantee“The fact that this device does not cause”Risks to financial stability, the resilience of the banking sector and the granting of credit“, which can turn”negatively affect economic growthSpanish, estimates the European Central Bank.
For this reason, this tax shall be subject to”complete analysis“And the”ScrutinyThe monetary authority added, noting that credit institutions are facing “Economic and financial environment“marked”suspicion“. The Frankfurt-based institution also mentions the risk of distorting competition, as the tax applies only to the largest banks.”It is desirable to put clearer terminology in the final text on the criteria for identifying facilitiesconcerned, she insists.
Spanish Economy Minister Nadia Calvino was the first to respond to the European Central Bank on Friday. “Banks in Spain currently have very high solvency ratios“and edit”Extraordinary benefitsShe said on the sidelines of a trip to London because of high interest rates. so there”There is no reason why this tax is temporary and limited“aimed at financing measures to support purchasing power in the face of rising inflation, and risks”give credit” And the “The proper functioning of the financial systemSpanish added.
“National Judiciary”
The Spanish tax takes the form of a 4.8% tax on the interest margins and commissions applied by banking groups to their activities in Spain. Only banks with profits exceeding 800 million euros in 2019 should be affected. A sufficiently framed device, according to Madrid, to avoid any adverse impact. “We have already studied the issues raised by the European Central Bank when drafting and introducing this taxMs. Calvino confirmed. A message conveyed by Social Security Minister José Luis Escriva, former director of monetary policy at the European Central Bank, who also judged “theSurprisemonetary object analysisGiven the current situation“.
“When the European Central Bank raises interest rates, why does it do so? It does this to limit credit growth‘He said, ‘The verdict’.contradictory“The fact that the European Central Bank is concerned about the number of loans going down at the very moment it raises key interest rates. Mr Escriva, a senior figure in Spain’s left-wing government, played down the scope of the ECB’s advice, noting “general recommendations“Without a binding value to Spain, being a region that falls under”national efficiency“.”This is not the first time“that the European Central Bank”It publishes a report with this kind of characteristic: it must be copied and pasted‘, was sentenced.
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The introduction of this tax was strongly criticized by the Spanish banking giants, who fear distorting competition with their European counterparts. It was also rejected by the People’s Party (right), the main opposition party. “Judgment is a choice, and we will not allow suffering“A lot of Spaniards suffer from it because of high inflation and interest rates.”It is done for little benefitThis summer, Mr. Sanchez argued. Spanish banks have achieved record profits in recent months, like almost all European banks. The net profit of the five member groups of Ibex 35 (Santander, BBVA, Caixabank, Sabadell, Bankinter) has reached 16 billion euros since January. In addition To Spain, other countries have said that in recent weeks they are considering imposing an exceptional tax on banks, including the Czech Republic and Hungary.
