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  • Spain's acting Prime Minister Pedro Sanchez and Unidas Podemos leader Pablo Iglesias shake hands as they present their coalition agreement at Spain's Parliament in Madrid, Spain, Dec.30, 2019.

    Spain's acting Prime Minister Pedro Sanchez and Unidas Podemos leader Pablo Iglesias shake hands as they present their coalition agreement at Spain's Parliament in Madrid, Spain, Dec.30, 2019. | Photo: Reuters

Published 30 December 2019
Opinion

The governing plan includes tax rises for higher earners and large firms, an increase in the minimum wage and a partial overturn of regressive aspects of the conservative Popular Party’s labor reforms.

Spain’s Socialist Worker's Party (PSOE) and the left-wing Unidas Podemos party presented Monday their joint governing deal, outlining the policies that they want to implement from their planned coalition government. 

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The governing plan includes tax rises for higher earners and large firms, an increase in the minimum wage and a partial overturn of regressive aspects of the conservative Popular Party’s labor reforms.

“We present a government program to defend and expand social rights and public services, make feminist policies and preserve the environment,” Unidas Podemos leader Pablo Iglesias said.

According to the deal, income tax for those earning more than US$145,000 a year will rise by two percentage points, and by four points for those who earn more than US$336,000. 

Capital gains tax above US$157,000 will also increase from 27 percent from the current 23 percent tax. While corporate tax will have a new minimum rate of 15 percent, while banks and energy firms will have to pay 18 percent.

Today, PSOE and Unidas Podemos sign a progressive, courageous and ambitious agreement to advance our country in defense of social cohesion and against inequality. An agreement for a progressive government that leaves no one behind.
 

“We present a government program whose root is the idea of ​​progress, that addresses challenges as opportunities to make our country progress, to build a better, fairer and more supportive Spain,”  caretaker Prime Minister and PSOE leader Pedro Sanchez reaffirmed.

The plan includes an increase in social spending, especially in programs for the universalization of education; access to affordable housing; health programs, and support for small businesses. 

The parties will also ditch regulations that allow companies to fire workers who take official sick leave, as well as introducing measures to precarious and temporary jobs. The minimum wage could rise by as much as 60 percent, reaching almost US$1300. 

With regard to pensions, the progressive coalition will eliminate the formula that links pensions to life expectancy, as well as getting rid of the revaluation index, which sees pension rises subject to the performance of the Spanish economy. This, the document states, will “ensure the sustainability of the system in the medium and long term.”

All the reforms and plans rely on Sanchez obtaining the support of other parties in order to get back into power, as PSOE’s 120 seats and the 35 won by Unidas Podemos leaves them 21-seats short of a majority in the 350-seat parliament.

However, obtaining seats from secessionists movements in Catalonia and the Basque country looks increasingly likely to happen in 2020 as the PSOE and the Catalan Republican Left (ERC) have nearly closed a deal to secure the latter’s abstention at an investiture vote.

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