Following the string of news articles and public statements on the Government's intention to establish the temporary levy on the banking sector as permanent, the banking associations AEB and CECA express their rejection in the strongest terms due to the impact on the sector and on the Spanish economy

If this initiative is maintained, Spain would become the only European jurisdiction with a permanent tax of this kind, which constitutes a competitive disadvantage for Spanish banks and, therefore, for the promotion of the economy, in a context where Spanish banking is the sector paying the highest taxes in Europe.

It also poses an obstacle to the completion of the Banking Union and goes against the recommendations of institutions such as the European Central Bank (ECB) and the International Monetary Fund (IMF) that advise against these taxes, because they divert resources that could be used to strengthen the capital of banks and maintain the flow of credit to companies.

This type of tax has a direct impact on the financing capacity of the real economy and, therefore, on job creation and on the growth of our economy. Collection of this tax leads to an estimated €50 billion erosion of the Spanish banking sector's financing capacity.

Whilst this tax, devised as “extraordinary”, was justified by the Government due to the growth of income derived from the rise in interest rates since 2022, this justification is no longer valid. It should be noted that the expected change in interest rates does not justify the conversion of the temporary levy into a permanent tax. The ECB has started to cut official rates. Specifically, during the year there has already been a reduction of 75 basis points, which has been reflected in drops in the Euribor. The one-year Euribor is currently below the level of December 2022, when the tax was approved. Analysts anticipate that this downward trend will continue next year so that interest rates could stand at 1.75% at the end of 2025.

Finally, the inclusion of the tax into our legal system by means of a decree law or, alternatively, by means of an amendment to the articles of a bill currently before Parliament, as suggested by information, undermines the quality of public debate and makes it impossible for the affected sectors to share their thoughts on regulations that impact their business.

In short, taxing banking activity permanently with an extraordinary tax means slowing down investment, economic growth and job creation in the economy as a whole.