Beware the Montoro effect: two charts

2012 09 31

The first records after the Spanish government incremented the VAT rate have been nothing short of devastating. Retail consumption has dropped by 12.6 percent in real terms.

Since 2008, retail sales have suffered a cumulative decrease of 22.4 percent.

I blame the Treasury minister Cristóbal Montoro. And this isn't his only mistake. Mr Montoro is also responsible for Spain paying some of the highest prices on energy in Europe. The reason is that the country maintains the largest renewable energy park in the world, but it does so at a steep cost and via big, fat subsidies that make taxpayers' already heavy burden even heavier.

No wonder Spain's GDP can barely raise its head since the 2008 crisis.

2012 10 20


About the Author

Miguel Navascués
Miguel Navascués has worked as an economist at the Bank of Spain for 30 years, and focuses on international and monetary economics. He blogs in Spanish at: http://