Politics, restriction of the economy


Madrid

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Policy constraints are a variable that intermingles in economic life with relative frequency. Now, the rise in electricity prices poses the problem in all its harshness and the skyrocketing prices drag social discontent to limits that are difficult for any government to bear. The fact of talking about international price rises and that its transfer to the consumers’ bill is neither automatic nor total, does not suppose a relief since there are few who understand its operation and pay attention to it.

For this reason, faced with social discontent, the Government has made the decision to violate the normal functioning of the economy, intervene in the system that was already highly regulated and

divert a portion of business income to consumers. An anomaly given that, in free market economy systems -for plus surname ‘social’ that is added-, the prices are set by the market according to the game of supply and demand and there is a whole legal body aimed at guaranteeing its proper functioning.

How to judge the measure? First of all, as inevitable. Between the ‘evil’ energy companies and the ‘defenseless’ citizens, the decision is easy for any government that, in addition, has set an ‘example’ by reducing the tax burden of the bill, even if that hurts the public accounts whose complaints are never heard. . But the triumph of politics should not hide the collateral damage it causes. first, in legal certainty. Companies invest based on the expectations generated by a certain legal framework and changing it, while it is in force, is an anomaly that can set back future investments. Second, the measure has to be temporary, as is the reason that justifies it. Those who like public intervention in the pricing system should review the immense list of damage that such a practice has caused at all times and in all latitudes. And third, we must take advantage of the occasion to grow older and face the effects that our decisions cause. A good part of the problem is caused by the price reached by the CO2. A mechanism planned to fight against climate change whose cost we can assume, but not ignore.

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