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The price of the pact

The government manages, despite the 155 and the political crisis, to approve the budgets

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The price of the pact

With yesterday's approval of state's general budgets for 2018, Government achieved objective that had been proposed to ensure a stability horizon that would allow it to withstand legislature until its eventual depletion in 2020 because, in worst Cases, Rajoy could extend se budgets until next election appointment.

Approval is good news at a time marked by double uncertainty. On one hand, decision of independence to appoint a president of presidency has not only reopened debate on validity, continuity or re-edition of article 155, but also points to an intensification of political and social tensions experienced in Catalonia in year Past. The Catalan challenge will once again require unity of constitutionalist forces around a government already sufficiently weakened by its poor electoral prospects and cases of corruption to withstand eventual loss of support Parliamentarians who had so far guaranteed ir continuity. Punishing Rajoy at same time punishing all Spaniards is not a good policy.

Previous Editorials

A very expensive pact (28/04/2018)

Late budgets (28/03/2018)

Anti-Crisis Plan (10/03/2018)

In addition to specific problems of Spain, international and European horizons accumulate enough elements of risk. At a time marked by protectionist pressures coming from Washington, rise of price of oil and economic uncertainty generated in Europe by coming to power in Italy of populist and Eurosceptic forces, it is necessary to say that Spain has been able to find a way to safeguard ir stability, even in a precarious way.

For different reasons, and above all obeying its own calculations of political, economic and electoral interest, citizens and PNV have decided to support budgets. In case of former, a withdrawal of support would have assumed responsibility for an electoral overtaking or worsening of instability at a critical juncture.

For PNV, despite having conditioned its support to raise 155, it has become clear that only responsibility for worsening of Catalan situation corresponds to decisions taken by independentists. The vote of PNV has revealed refusal of Lehendakari Urkullu to sacrifice considerable gains for its autonomous community achieved in negotiation in order to satisfy radicality of Puigdemont and Torra, bent on encouraging victimism to Coast of interests of Catalonia. Undoubtedly, PDeCAT and ERC should take note of this loss of sympathy, as well as skill and pragmatism of Lehendakari.

The achievement is tarnished in strictly economic terms because budget generates considerable doubts about stability of public finances and fiscal path that Government proposes to achieve. Concessions to PNV and five or parties, including revaluation of pensions in 1.6% retroactively, make it difficult to achieve a deficit adjustment to 2.2% this year; If you can get it in 2.6%, it will be a remarkable feat. This questions purpose of reducing debt, an alarming weakness in financial policy. All of this will have to be given by executive in Brussels.

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