Spain passes 2022 budget with record social spending

OVIEDO, Spain

Spanish politicians passed the country’s 2022 budget on Tuesday after lawmakers widely supported a new amendment regarding minority languages.

Drawing on the first tranche of €70 billion ($79.11 billion) from the European Union’s COVID-19 recovery funds, the 2022 budget includes a historic amount of social spending – nearly €250 billion ($282.55 billion).

With the spending, pensioners, people on welfare and public sector employees will see their monthly checks increase by at least 2% next year.

To boost the cultural sector, everyone turning 18 years old will also be given a €400 ($452) grant to spend on items like books or activities like concerts or theater.

Around 70,000 people aged 18 to 35 could also benefit from an up to €250 ($283) per month grant that the government is offering to help mid-low earners afford rent.

The Spanish government asserts that the record spending is compatible with a shrinking state deficit. Predicting 7% GDP growth for 2022, something many experts view as highly optimistic, the government says it will take in a record amount of money next year.

At the same time, tax hikes are on the horizon for some. Starting next year when the budget takes effect, large companies will have to pay a minimum of 15% in taxes – a figure in line with the G20 commitment to corporate taxation.

The budget got the final go-ahead on Tuesday after 281 politicians voted in favor of a final amendment and just 62 voted against it.

The consensus signals more stability for Spain’s first-ever coalition government led by the Socialists and Unidas Podemos. Between 2015 and 2019, Spain saw four national elections.

This is the first time since 2014 the Spanish government managed to pass two annual budgets in a row.

Spanish Prime Minister Pedro Sanchez hailed the consensus as a key part of Spain’s recovery.

“I hope this will be the prologue for many more agreements,” said Sanchez.