LONDON | Another day spent with the euro area teasing markets’ anxieties, another voice in the background alerting of a wall of trouble building up on the other side of the Atlantic. The US budget deficit is reaching a size many feel uncomfortable about: in Wednesday’s fundamentals briefing, Legal & General Investment LGIM suggested that the outlook for US debt is actually worse than most people currently believe. “Not many…
MADRID | Elvira Rodríguez, who chairs the Spanish parliamentary committee on Economy and Competitiveness, and is a former State secretary for Budget and Expenditure, had two words to say about the government’s public budget: rigour and responsibility. Rodríguez published Monday an op-ed in the business daily Cinco Días, probably in advance of the heaviest wave of criticism that the country’s budget plans have had to endure during the last decade. She…
MADRID | The Spanish government claims the 2012 budget to be the toughest ever. On face value it embodies a 2.5% GDP deficit reduction, an awesome effort by any standard. Slashing expenditure amounts to two thirds of the squeeze, the rest falling on tax adjustments. Will budgetary crunch depress activity or axe main spending policies? A closer look dispels any anxiety over these daunting effects. Many of the cuts come…
By Luis Arroyo, in Madrid | Spain’s 2012 budget brings a contraction in public spending of €18 billion and an increase in taxes of €9 billion, both items totaling €27 billion, which would put central government deficit at 3.5%. To reach the pursued 5.3%, the rest of the effort corresponds to the autonomous regional governments, not exactly the most successful part of the public administration in matters regarding austerity. In addition,…
By Juan Pedro Marín Arrese, in Madrid | The Spanish government will unveil today its budget bill for 2012. In the good old days, analysts and observers bent over its pages to find the clues for public sector priorities in the year. Nowadays you can dispose of such a demanding task. Brussels has unravelled its complexity, reducing the whole exercise to the simplistic aim to meet, no matter how, the deficit…
By Juan Pedro Marín Arrese, in Madrid | Spain’s government has pledged to close down 80 publicly owned enterprises, an impressive figure at face value. But most of the adjustment is grounded on the simple recipe of merging subsidiaries into mother companies. Thus the only tangible savings amount to allowances paid to suppressed Boards of Directors. A negligible €1 million cut off that will add very little in terms of budgetary…
MADRID | The Spain’s minister of Economy and Competitiveness Luis de Guindos announced Wednesday that he will explain the euro group the country’s 2011 budgetary slippages “with transparency and and accuracy,” reports new agency EFE. De Guindos also will defend that this year’s Spain’s commitment to fiscal consolidation is ‘absolute’, in spite of the estimated 2011 ‘complex’ deficit drift of 8.5% (from previous 6%) and the EU’s economy negative growth…
