Punishment for Spain's reformist paralysis

Brussels cuts 1.1 billion from recovery funds due to pending measures.

The government's obvious inability to implement any significant initiatives is damaging the credibility of the Spanish economy and also impacting the public coffers. EU authorities have opted to deduct €1.1 billion from the fifth installment of recovery funds due to the country's failure to meet several milestones it had committed to.

Specifically, the equalization of diesel and gasoline taxes, the conversion of temporary public administration employees to permanent positions, and a digitalization program for regional and local authorities. Among these measures, which Pedro Sánchez previously committed to with Brussels as part of the Recovery Plan, the increase in diesel taxes stands out as a core initiative of the PSOE's climate strategy.

Former Vice President for Ecological Transition, Teresa Ribera, proclaimed a few days after taking office in 2018 that diesel's "days were numbered" in our country, among other reasons because she intended to put an end to the lower tax burden on this fuel compared to gasoline. This caused a historic reversal in car sales, until then dominated by diesel, and the understandable outrage of manufacturers and distributors.

Seven years later, the Socialist government finally acknowledges its inability to implement this measure, which had been rejected on several occasions by the majority in the Congress of Deputies. Most recently, last November, when Podemos joined forces with the PP and Vox to reject the amendment introduced by the PSOE to the law on the global minimum tax for large companies as a way to secure express approval for the diesel tax increase and avoid punishment from the European Commission, of which, paradoxically, Ribera herself now sits.

The left-wing populist party justified its veto at the time on the grounds that the measure would harm middle-class workers, most of whom have been unable to replace their diesel cars with hybrid or electric ones. The truth is that, despite its use having declined in recent years, it remains the most consumed fuel by drivers in our country.

The government has six months to present Brussels with a roadmap to meet the unmet milestones, but given its extreme parliamentary weakness amid the Santos Cerdán scandal, it seems unlikely to achieve this in time.