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The Pain in Spain

In Spain, the government is taxing big banks to pay for the inflation caused by the energy crisis. This is called a “windfall tax.”

The banks have no choice but to pay it but now they are going to challenge it in courts. According to the Financial Times, “Santander and BBVA plan to challenge the tax, according to people with knowledge of their thinking, while Bankinter and Abanca have publicly said they will. The boards of Sabadell and CaixaBank have yet to decide.”

The tax came from Spain’s Socialist-led party. It adds a 4.8% tax on banks’ income. It may also put this tax on energy companies. The banks say that if they have to increase their tax payments, it will harm the economy even more by reducing the amount that they can lend to consumers. The European Central Bank agrees with the banks and warned against this tax last year.

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