Inflation will force the Canary Islands to adjust its budget by 400 million

Inflation will force the Canary Islands to adjust its budget by 400 million

Image of a meeting held yesterday between Nueva Canarias and the Confederation of Entrepreneurs. / EFE

The Flores Pact studies direct aid to the most affected economic sectors, but flatly rejects tax cuts

B. Hernandez

B. HERNANDEZ The Gran Canarian palms

Public administrations will also see their budgets reduced by the impact of inflation, which is being aggravated by the war in Ukraine. In the case of the regional government, it will have 400 million less than the 9,100 million of spending budgeted for 2022 "if inflation remains at current rates," according to the regional vice president and Minister of Finance, Román Rodríguez. “We will have to settle accounts just as families and companies do, because in this context no one will dare to raise taxes.”

Rodríguez made these statements after a meeting he held, along with other leaders of Nueva Canarias (NC), with the Canarian Confederation of Entrepreneurs (CCE) to present his proposals for the congress that the nationalists are holding on April 8 and 9 in The Gran Canarian palms. At the meeting, politicians and businessmen agreed on his concern about the consequences of the war, not only because of the impact on the lives of Ukrainians, but also on security and the economy.

In this sense, the vice president reviewed the situation that is being generated by inflation and the rise in costs, especially energy, not only for companies, but for families and the public sector.

Even so, he rejected a general reduction in taxes - which are immediately absorbed by prices, he said - and instead was in favor of "surgically" helping certain sectors, such as the livestock sector, tomatoes or others that are affected. due to this situation, as is the case of food, which has seen the price of flour rise. In any case, he pointed out that these possibilities will be evaluated but he warned that the autonomous community's margin of action on inflation "is limited" and will be subject to the decisions that are established fundamentally at the European level.

He recalled that Pedro Sánchez has already pointed out the possibility of lowering VAT on energy again to 4% "as it has already gone from 21% to 10% without an impact on prices." He pointed out that the Canary Islands have the IGIC at 0% for 96% of users, while the fuel tax is between 50% and 60% below what is charged in the rest of Spain and in the case of professionals - transport, livestock, etc. - 68% of the tax is returned, which is half of the State.

Among the measures that can be adopted in the archipelago to support the most affected sectors, Román Rodríguez cited the use of POSEI in addition to 100% in the livestock sector, "doing a good REA balance" or asking large stores to comply with the food chain "because it cannot be sold below the production price". He also agreed with the businessmen that "everyone will have to adjust and pay the consequences of an inflation that makes us all poorer", including the public sector "because we are the most important economic agent". In this regard, he pointed out that the Government of the Canary Islands had made a spending forecast based on prices that have now changed and must be reviewed. The autonomous community, said the vice president, has an electricity bill for 2022 of 23.5 million, "but if prices are not corrected, we will be closer to 60 million."

In this regard, he underlined the importance of the European Council convened for next week, which must provide a security, humanitarian and economic response, while highlighting the initiative put forward by Pedro Sánchez regarding a national response plan to war. He considers that the states' margins of action are very limited, so global intervention mechanisms will have to be sought.

In his opinion, one of the solutions to the rising cost of energy is to "decouple" gas from the calculation of prices, because it is the minority component but the one that determines the price. In his opinion, this measure - which is the responsibility of the European Union - "will substantially lower the cost of energy", an issue in which the president of the Confederation of Businessmen, Agustín Manrique de Lara.

On the other hand, and regarding the Nueva Canarias congress, the leaders of this formation conveyed to the employers' association the idea that they continue "in the space of progressive Canarianism, defending the interests of the Canary Islands." In this sense, explained its president, Román Rodríguez, they maintain the "defense at all costs" of the REF, the commitment to continue defending that the Canarian Investment Reserve (RIC) of 2017 can materialize in 2022, the return of the IGIC for the invoices unpaid debts from Thomas Cook, as well as the pending fringes of the road agreement or that the migratory policies "treat the Canary Islands fairly".

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