Positive assessment of the CEOE of Cuenca, Soria and Teruel, although this is not necessarily synonymous with putting into practice

Cuenca, Soria and Teruel, October 15, 2021. CEOE CEPYME Cuenca, FOES and CEOE-CEPYME Teruel make a positive assessment that in the one hundred and fifteenth additional provision of the project of the General State Budgets (PGE) for the next year 2022 include regional state aid for the provinces of Cuenca, Soria and Teruel within the framework established at European level. The PGE project states that the Government “will establish the ways to make the most of the existing aid possibilities for areas with a very low population density, specifically those with a population density of less than 12.5 inhabitants per square kilometer ”.

This step follows the path started by the lobby of the companies in Cuenca, Soria and Teruel with the presentation in 2019 of the report on ‘A differentiated taxation for the progress of depopulated territories in Spain’ where the cost and the return to the public coffers that the different fiscal measures available could entail, as well as their contribution in correcting the territorial imbalances caused by depopulation.

In September 2020, another fundamental step was taken with the presentation by business organizations and the Autonomous Communities of the allegations to the draft of the State Aid Guidelines planned for the period 2022-2027. In the case of the three CEOE, its content was based on presenting a demographic diagnosis of the three provinces, followed by an analysis of its economic structure and business fabric. This evidenced, on the one hand, the existing demographic similarities with the Scandinavian regions and, on the other, that the application of these aids would not affect the principles of competition and free markets at a national or European level. The European Commission included these allegations in the final text of the Guidelines on state aid for regional purposes, recognizing the provinces of Cuenca, Soria and Teruel among the territories likely to benefit from aid intended for companies in order to compensate for the competitive disadvantages that causes depopulation.

Thanks to the joint effort developed by the SSPA Network and its respective Autonomous Communities, recognition has been achieved by the community authorities and now also by the Spanish ones. Although the businessmen remember that the fact that they have been included in the budgets is not synonymous with their being put into operation, and therefore it is necessary to continue working to make this possibility effective, and for this reason they will follow the steps in the negotiations of the budgets and they will request a new meeting with the political and technical leaders of the Ministry of Finance, since the details of their practical application remain to be specified in the shortest possible time and to urge their immediate implementation because they are essential to avoid progressive depopulation of these territories.

For the CEOE it is important that the formula chosen by the government to apply this aid is as effective as possible, for this reason it is necessary to apply the maximum percentage allowed by Europe, that is, 20%, in the formula for a reduction in labor costs .

The reduction of labor costs of companies is an instrument that has been applied by the Norwegian government since 1975, whose objective is to increase employment in the most socioeconomically vulnerable regions, improving their competitiveness and increasing their market share. This increase in competitiveness translates not only into the creation of more employment, but also of better employment with the increase in wages, thanks to its transposition to collective bargaining. The results of this policy can be seen reflected in the population growth of more than 5% in the regions considered “very sparsely populated” during the last decade.

The operating aid could have another form, for example, subsidies to reduce the current expenses of the companies, that is to say a positive benefit instead of the reduction of a burden (as would be the case of the Social Security bonus). After knowing the draft of the PGE we can say that the first cannot be the formula to apply, since if it were, it should have included the necessary item to pay for these subsidies to companies. In the case of the reduction of labor costs via a bonus to Social Security contributions, we understand that what is proposed is a lower income for the State, which is why there is no item in the PGE.