Committee for the Abolition of Illegitimate Debt

 CADTM: To your knowledge, is there currently any country in Europe that is taking measures different from those of the Belgian government and seeking to raise money from the huge and ever-growing profits of large corporations?

In a very timid manner, the Spanish government has introduced a one-off tax on the super profits of Spanish banks, and this has yielded results

Éric Toussaint: In a very timid manner, the Spanish government has established a special tax on the super profits of Spanish banks, and this has yielded results. In 2023, Spain collected approximately €1.2 billion in additional revenue thanks to this bank surtax [1] . In 2024, the revenue amounted to approximately €1.7 billion. The amount is expected to reach around €1.4 billion, according to forecasts for the whole of 2025. This is a tax on the margin of interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. and net commissions, with progressive rates based on income. In the case of very large banks, the rate can reach 7%, as is the case with CaixaBank, Santander and BBVA, while others pay a lower percentage. What was initially an exceptional tax has been extended and will remain in force until at least 2027. There have been no measures taken by the European Commission against Spain.

In Spain, the legal minimum wage and basic and average pensions have been increased by the government.

I would point out that when Georges-Louis Bouchez, president of the Reformist Movement (MR), a pillar of the right-wing government, essentially said to Paul Magnette, president of the Socialist Party (PS) in French-speaking Belgium: “How can you take Spain as an example when the legal minimum wage is significantly lower than the legal minimum wage in Belgium?” he is not using a serious argument. The argument is: has the legal minimum wage been increased in Spain, yes or no? Are the low and average wages of workers, of the working population, increasing, yes or no?

Of course, Spain is starting from a lower base. It is important to note, and Georges-Louis Bouchez is aware of this, that the difference between the legal minimum wage in the countries that pay the lowest wages and are members of the European Union, and those that pay the legal minimum wage or guarantee the highest legal minimum wage, namely Belgium and Luxembourg, is 1 to 4. There is a fourfold difference between the legal minimum wage in Bulgaria on the one hand and that in Belgium, Luxembourg, Germany and France on the other. The legal minimum wage in Spain is more than double the minimum wage in Bulgaria and is roughly 33% lower than that in Belgium. But what is very important is to know whether a government in a European Union country promotes a real increase in the legal minimum wage and the incomes of the majority of its population, the bottom 50% or the bottom 70%, and whether this promotes consumption and economic activity.

In the case of Spain, this is tentatively the case, as it was in Portugal a few years ago. In Portugal, this did not last and the Portuguese socialist government returned to austerity policies and disappointed its electorate, which brought the right back into government and contributed to a sharp rise in the far right. I am not suggesting that Spain is a model, far from it, but since you ask me the question: “Is there a government in the European Union that guarantees Guarantees Acts that provide a creditor with security in complement to the debtor’s commitment. A distinction is made between real guarantees (lien, pledge, mortgage, prior charge) and personal guarantees (surety, aval, letter of intent, independent guarantee). an increase in the incomes of the majority of its population at the bottom of the scale and increases certain public expenditures while increasing revenues by making the richest pay a little more?”, my answer is: the Spanish government timidly fits this description.

In Belgium: the gross statutory minimum wage calculated on an annual basis rose from €18,383 to €24,840 during the period 2017-2025, a nominal increase of 35%. In Spain: the gross statutory minimum wage calculated on an annual basis rose from €9,906 to €16,576 between 2017 and 2025, a nominal increase of 67%. Spain therefore saw a much larger increase in the statutory minimum wage than Belgium over this period. I should point out that in both cases these are nominal increases. Of course, in both Belgium and Spain, the impact of inflation Inflation The cumulated rise of prices as a whole (e.g. a rise in the price of petroleum, eventually leading to a rise in salaries, then to the rise of other prices, etc.). Inflation implies a fall in the value of money since, as time goes by, larger sums are required to purchase particular items. This is the reason why corporate-driven policies seek to keep inflation down. must be taken into account in order to calculate the real change in wages in terms of purchasing power.

The nominal gross legal minimum wage on an annual basis has been increased in Spain by around 67% between 2017 and 2025, compared with 35% in Belgium

We can also mention the introduction in Spain of the minimum living wage, which, although only received by a small proportion of the poor population, offers a new form of social protection. Certain measures have also been taken to protect working-class families who have been victims of the mortgage Mortgage A loan made against property collateral. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral. crisis and subjected to excessive interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation. from abuse by banks. Poverty rates have improved, albeit modestly.

 Question: This Spanish recovery policy seems to be working, since Spain currently has the highest growth rate in the eurozone, right?

Yes, absolutely. So the effect of economic recovery and stimulation through increased incomes for the majority of the population, those with average or low incomes, is having a real economic recovery effect. And Spain’s growth rate is significantly higher than the German, Belgian, French and Dutch rates. That is absolutely clear. Yes. 

 Question: Is their current policy increasing their public debt?

Spain’s policy is not increasing public debt because they are increasing their revenues, as we have just said, particularly through the tax on bank super profits

No, it is not increasing public debt because they are increasing their revenues, as we have just said, particularly through the tax on banks’ super profits. Pedro Sánchez’s government has implemented deficit control measures that have reduced public debt from 119% of GDP GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. in 2020 to 103% of GDP in 2025. This is due to growth that has boosted public revenues, allowing for high public spending, although lower than revenues. In the case of Belgium, public debt has fallen from 111% of GDP in 2020 to 106% in 2025.

 Question: Are there any other measures or information regarding the Spanish government’s policy that distinguish it from the Belgian government or other right-wing governments?

The Spanish government also applied a tax on the electricity sector and blocked some of the increases that electricity companies wanted to implement. The Spanish government slightly increased taxes on the highest incomes (those above €300,000 per year). So, the government has increased its revenue and, on the other hand, it has distributed a little more income to those who spend their income on everyday consumption. This has had a multiplier effect on the economy and therefore on growth. It should also be noted that VAT in Spain on basic foodstuffs (such as bread, milk, eggs, fruit, vegetables and olive oil) is 4%. In Belgium, the rate on the same products is 6%.

When comparing Spain and Belgium, we could also look at the cost of energy for households. In 2025, there will be a clear difference between electricity prices for households in Spain and Belgium. In Belgium, the cost is around €35.7 per 100 kWh, while in Spain, the cost is around €26.1 for the same amount of kWh. In other words, electricity is much more expensive in Belgium than in Spain for household . This means that a Belgian household pays around 37% to 40% more per unit of electricity than a Spanish household, according to recent European data provided by Eurostat. The price of gas is also lower in Spain than in Belgium. Energy prices in Spain have been supported by government measures and a high share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. of renewable energy (35%), contributing to lower tariffs than in several other European countries, notably Belgium.

In Spain, the 2021 labour code reform is generally considered to have reduced the proportion of temporary contracts, contributing to a decrease in precarious work and greater job stability. In Belgium, where precarious work is less widespread, available data suggest that job insecurity remains a significant problem, even though the situation continues to be better than in Spain.

I would point out that this is a modest example of what a government can do, and there is certainly room for improvement in Spain. Nevertheless, it is true that this is an interesting example that economists, journalists and politicians would do well to examine in order to show that it is not a policy of reducing public spending, as pursued by Bart De Wever’s government, that is the solution.

 Question: Is Spain’s migration policy different from that of Belgium and other countries with right-wing governments?

According to BBVA, Spain’s second largest bank: “Immigration has become a driver of job creation.”

Among the factors that have boosted the Spanish economy, several studies highlight the positive contribution of migrants who have arrived in recent years. BBVA, the country’s second-largest private bank, writes:

“Immigration has been a key factor in the growth of the Spanish economy after the pandemic. (...) Spain is facing a demographic challenge. The retirement of the baby boomers is contributing to a reduction in the working population, which is affecting both economic growth and the sustainability of the welfare state. In this context, immigration after the pandemic is helping to cushion its effects, as well as those of the war in Ukraine and the inflationary crisis, and is enabling Spain to grow more than other EU countries. Immigration has become a driver of job creation. According to data from the Labour Force Survey (EPA), in June 2024, Spain reached a record 21.7 million people in employment, 1.7 million more than at the end of 2019. [2]

The Spanish government has adopted restrictive measures regarding the reception of migrants and asylum seekers, but less harshly than the Belgian government or other right-wing governments. The Belgian government has announced a very restrictive migration policy. It is described by the government as “the strictest ever applied.” It includes, among other things: tougher conditions for family reunification, restrictions on access to social assistance, a reduction in reception places, and accelerated return/deportation measures.

Returning to the reasons for Spain’s better economic performance compared to Belgium, we must also take into account the much greater impact of tourism in Spain than in Belgium in terms of revenue and job creation. Tourism to Spain continues to grow. The consequences are positive for consumption and growth, but negative for the local population in terms of housing, as far too many homes are used for tourism. This has led to a shortage of housing for the working classes and caused property prices to rise. Tourism also has a negative ecological impact.

In conclusion: if we compare Belgium (and other countries led by right-wing governments or UK with Starmer “Labour” government) with Spain, Spain comes out better. Nevertheless, the Spanish government is not touching the neoliberal model that dominates the economic policy of other European countries (whether they are EU members or not). Even though it is taking timid social measures to mitigate the most brutal effects of the rising cost of living and is not carrying out the brutal attacks on social rights seen in most European countries, Spain, like elsewhere, is seeing a rise in inequality and an increase in the wealth of the richest, particularly the richest 1%. In terms of foreign policy, the Spanish government is slightly less complicit in the ongoing genocide in Palestine, but it has not broken off relations with Israel. Furthermore, it collaborates closely with the authoritarian Moroccan regime in repressing migrants and supports Morocco’s colonial policy in relation to Western Sahara (which, it should be remembered, is a former Spanish colony). The Spanish government does not strictly follow Trump’s demands regarding NATO NATO
North Atlantic Treaty Organization NATO ensures US military protection for the Europeans in case of aggression, but above all it gives the USA supremacy over the Western Bloc. Western European countries agreed to place their armed forces within a defence system under US command, and thus recognize the preponderance of the USA. NATO was founded in 1949 in Washington, but became less prominent after the end of the Cold War. In 2002, it had 19 members: Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, the UK, the USA, to which were added Greece and Turkey in 1952, the Federal Republic of Germany in 1955 (replaced by Unified Germany in 1990), Spain in 1982, Hungary, Poland and the Czech Republic in 1999. , but it does not leave NATO and is increasing military spending.

The fact that the Spanish government is not going far enough in implementing progressive measures and that it is not breaking with the neoliberal model that favours the interests of large private companies and their wealthiest shareholders is likely to disappoint the working classes and bring the right wing back to power in the coming years.

The author would like to thank Daniel Albarracin, Sergi Cutillas, Fernanda Gadea, Pablo Laixhay, Fatima Martin and Maxime Perriot for their review and inputs. The author is solely responsible for the opinions expressed in this article and for any errors it may contain.