Spain is about to hold its most contested general elections in history. The Spanish President Pedro Sánchez called general elections last February after the Government’s defeat to approve the General State Budgets in the Congress. This Sunday 28, Spanish citizens will vote in a political scenario more fragmented than ever, although in the last few months two blocks have been formed reproducing the old left-right division that existed before. The manifesto proposals vary greatly from one block to another so, depending on the winning side, Spanish economic policy can take completely opposite courses.
According to the polls, no party will obtain enough majority to govern alone, so candidates have already talked about possible coalitions. One the one hand, the Socialist Party (PSOE) and the anti-austerity party Unidas Podemos (renamed after the alliance between Podemos, the traditional left party Izquierda Unida, and the green party EQUO) represent the Spanish left wing. Both have left most of their differences behind in order to focus on a common enemy, Vox. However, despite their intention to establish a progressive Government together, the polls have indicated that they would need the support of more parties to reach the majority, and this is where nationalists may play an important role.
On the other hand, the conservative Popular Party (PP) and the liberal party Ciudadanos (Cs) have already declared their intention to form a coalition, but they would also need another ally according to polls. Who may that be? Most likely, that would be the recently emerged far-right party Vox, which has already given its support to PP and Ciudadanos to form Government in Andalucía last December. However, aware of the bad publicity of this ally, PP and Ciudadanos have avoided making references to the populist party during the campaign, although none of them rule out a future coalition with Vox.
In this context, it is not surprising that most of the economic proposals of the five parties reproduce to a large extent the block division. The clearest example is the fiscal policy proposals. PP, Ciudadanos, and Vox have promised a considerable reduction of taxes, especially regarding the Income Tax and its maximum rate. The three parties of the right have defended that, to increase the consumption and to grow the economy, it is necessary that individuals dedicate less part of their income to the State.
Another important part of their fiscal manifesto is the reduction of the Inheritance and Donations Tax, as well as the Corporate Tax,…