PSOE Proposes 8% “Social Justice” Tax On Banks

The Spanish Socialist Party (PSOE) has proposed a new plan to rescue Spain’s faltering pensions system that it would fund via what would amount to an 8% corporation tax increase on banks.

PSOE leader Pedro Sánchez announced the €1 billion measure—which was swiftly rejected by the banking sector—in Madrid on Tuesday.

Mr. Sánchez would also like to see a financial transaction tax put in place, in order to collect another several hundred million euros in revenue.

Banking sources told Spanish media that they feared the “extraordinary” measure would be nothing of the sort and become more permanent, given the long-term problems faced by the Spanish pensions system.

Asked on a leading radio show on Wednesday morning if the proposed measures were about “class revenge”, the PSOE’s economy and jobs spokesman, Manuel Escudero, preferred the term “social justice”.

The Socialist Party says the government’s labour reforms have not had a noticeable effect on social security income—with a fall in inflation adjusted income compared to 2011—despite a reduction in unemployment figures over the past couple of years.

The PSOE says this is due to the increased number of temporary or poor-quality jobs contracts in Spain, which do not generate enough social security revenue to ensure the viability of the pensions system.