Spain’s progressive coalition government on Tuesday reached an agreement for the 2023 budget, which includes significant military and social spending increases.
Six of every €10 ($10) will go towards social programs to support residents amid growing economic tensions. The government, also leveraging European funds, plans to spend €274 billion on public welfare – the highest amount in Spain’s history.
With that money, the government plans to spend €700 million to extend the offer of free short and medium-distance train travel for all of next year.
It will also launch a new monthly €100 check to mothers with children three years old or younger.
With inflation increasing by 9% over the last year in Spain, the government has agreed to increase pensions by around 8.5% in 2023, while public sector workers will see raises of at least 8% between 2021 and 2024.
At the same time, the most-left-wing government in Spain’s modern democratic history also agreed to increase military spending by 25%.
Currently, Spain spends just 1.01% of its gross domestic product on defense, the lowest share of any NATO country except for Luxembourg.
Its commitment to almost double its military spending in the next eight years entails the single most ambitious planned increase of NATO allies in Europe.
To help finance these plans, the government predicts it will raise tax revenue by 7.7% this year to a record €263 billion. Part of the increased revenue is thanks to a new wealth tax on people with more than €3 million, as well as windfall taxes on banks and energy companies.
The forecast budget deficit will be around 3.9% of Spain’s GDP.
While the coalition government managed to agree on the last budget before national elections next year, it will still need the backing of other parties.
Initial comments from parties that usually support the government suggest the budget will pass, perhaps with some modifications.
However, Spain’s right-wing opposition parties have slammed the budget, calling it irresponsible and “anti-social.”
Source: Anadolu Agency