F. Barciela / F. Gil Ljubetic | For a long time, and particularly since the crisis, it has been clear that the excessive level of payment default in our country is one of the reasons, if not the main one, behind the demise of our companies, above all SMEs.
Ten million Spaniards watched the most important debate between candidates from the four parties which could form a Government in Spain on Monday night. And yet the participants did not clarify the most important point: Will there be a Government after the elections on June 26?
Economic forerunners from the four Spanish leading parties engaged themselves in a confusing TV debate on Sunday night. The moderator was much to blame as she hardly clarified the key policy issues, although the participants also proved unable to put forward a coherent analysis of what is at stake in these elections.
The thesis is reasonable and well-known: greater growth, lower deficit. But what happened in 2015 seems to corroborate another idea: a larger deficit (-5%) fuels the biggest growth in Europe (3.2%). So the government unilaterally raises the 2016 deficit target from 2.8% to 3.6%, while Brussels is going for 3.9%.
Spain uses subsidies, perhaps to excess, as a means of support for a whole range of activities which the public adminstrations delegate to third parties who, at times, are rather lax in terms of control. Spanish cinema as well as renewable energies are in included in this “help” box, and let’s not forget training courses and career updating training.
One of the effects of the long, deep crisis has been the redrawing of the political map in Spain, as well as in other European countries, but these new balances need to mature and consolidate. The process is underway, but the destination has not been written down. Over the last few years we have witnessed the confusion of the European social democrats.
The average number of employed people signed on with the Social Security rose 1.13% to 17.661.840 in May from April, according to data released by the Employment and Social Security Ministry. Meanwhile, the number of jobless fell by 119,768 people in May from the previous month, standing at below 4 million for the first time in six years.
The Spanish banks could use mergers to achieve cost savings of up to 27%, due the increase in asset volumes these transactions would bring. The entities emerging from these tie-ups with over 200 billion euros in assets would cut costs between 8% and 27%, while those with 50-100 billion euros in assets could save between 4% and 20%, according to the latest edition of think-tank Funcas’ bi-monthly Economic Information Journal.
For some months now, social security contributions have been insufficient to pay for pensions, and it doesn’t look like the recovery in the economic cycle will correct the problem. Faced with a problem of these dimensions, the political parties have come up with various alternatives.
