Spanish energy companies and banks about to be affected by the new taxes (and their most conspicuous spokespersons) have publicly responded to the Government’s initiative to control their profits that fell from the sky —those generated by chance in the market, not by their own successful management — with the usual script.
Namely. Or the new rates threaten legal certainty. Or they will not benefit consumers because their cost will be passed on to them. Or their benefits (in Spain) are so meager that they are not worth the effort. And all this described as a “fiscal blow”, an expression used on all occasions, even if it is mere pinching.
By legal certainty they understand non-retroactivity, with respect to the date of the rule, not at the beginning of practices or exorbitant results. And of course not the legal security of consumers, companies or families, who suffer those heavenly benefits like infernal bills.
The ability to pass on the cost to the customer and thus fuel the inflationary spiral will depend on the texture of the legal provision: it can establish ceilings, caps or limits on certain operations.
And the modesty of profits induces compassion, especially in the energy case, more than in banking. Whatever scales are taken, the profits of the main companies in the sector in 2021 have multiplied between three and four times those of 2020.
In the case of the most notorious company, and with the most activist president —Ignacio Sánchez Galán—, Iberdrola, they were 3,388 million euros, not only exceeding those of the previous year but also, by 12%, those of 2019. And becoming in the best harvest within 10 years. Because of its activity in the US and Brazil, yes, but also thanks to the greater renewable energy production in Spain “at higher prices”.
Along with the strict figures, their heterodox behaviors stand out. Like the emptying of swamps to double their profitability by selling unlimited renewable hydro (with jumps amortized) at the price of gas, thanks to the marginalist mechanism. Or the refusal to provide disaggregated data on consumption for the purposes of the CPI, presented as a mere delay. Or the (alleged) manipulation of prices, which is now prosecuted by the National High Court, after imposing bail for more than 600 million. All of that is also (implicit) on the bill.
The fact is that, as Ignacio Fariza has related, the new energy tax arrives in Spain after taxing up to 25% the extraordinary results of companies in the United Kingdom, Italy, Greece and Belgium.
The impact of bank profits is more limited. But real. The ECB lends TLTRO liquidity (popularly, liters) to banks and charges interest of up to minus 1% (subsidizes it), for a term of up to four years, with the aim of encouraging credit to companies. The deposit facility replicates the scheme, but at one day. Having that cheap or super cheap money, banks rush to raise rates for their clients, although Frankfurt will not do so until the 21st.
And it is estimated that the future rises of the ECB could generate an unjustifiable joint extra profit for the eurozone entities, close to 24,000 million, which should be sterilized. A subject that must be approved by the issuing bank, or the Governments, or all of them. Gifts, the righteous.
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