New Austerity Measures

[mrypg9]

Rajoy has just announced a 3% IVA rise.....this is crazy. It can serve only to further depress the already stagnant economy.
Apparently 290000 extra public sector jobs have been created since the start of the crisis....utter folly as now many of them will be axed.
Does anyone in this Government have a clue about how to run an economy?
Even by the standards of witless free-marketeers, this is sticking plaster over a bleeding artery.
How can growth be generated against a backdrop of depressed spending and increased welfare benefits, even allowing for the proposed cuts in unemployment pay and other social welfare benefits????

[jojo]

heres what the BBC have to say BBC News - Spain PM Rajoy calls for fresh cuts as protests loom

Jo xxx

[Pesky Wesky]

Originally Posted by mrypg9

R
Apparently 290000 extra public sector jobs have been created since the start of the crisis....utter folly as now many of them will be axed.

Does anyone any more information about this?

I thought the whole idea was to cut public sector jobs as in Education and Health, which has been happening, so where has the growth in the public sector taken place?

[Alcalaina]

Sorry, just posted this on the News thread before I saw this.

Madness, but it's one of the conditions of the bank bailout.

[NickZ]

Originally Posted by Pesky Wesky

Does anyone any more information about this?

I thought the whole idea was to cut public sector jobs as in Education and Health, which has been happening, so where has the growth in the public sector taken place?

Now think about all the families that have members who are government workers.

Knowing your job may be at risk you stop spending.

1) VAT take goes down

2) The shops you used to shop at have less business. At best they pay less income tax at worst they shut down putting more people on the streets.

3) All the people who sold to those shops and the shop workers are now at risk.

The problem with things like this isn't that the unemployed stop spending it's that those with jobs and money stop spending.

[Alcalaina]

They are also axing the Christmas "extra" month's payment for public sector workers. This is NOT a bonus; it is part of their annual salary. So it's effectively another big pay cut for them.

Still, it will help the banks because people will have to use their credit cards instead to buy presents for their kids.

[mrypg9]

Here's the list:

• Reform of public administration, cutting €3.5bn


• A "drastic reduction" in the number of local public companies, and a reduction in the number at national level


• "Corrective mechanisms" for retional spending, and a new liquidity mechanism to help fund Spain's regions

• Civil servants benefits will be cut, and senior workers will lose the Christmas bonus. Further cuts at ministries are planned.

• Funding for unions and political parties will fall by 20%


• A review of unemployment benefits

• VAT will rise to 21%, from 18%. Property tax breaks will be eliminated, and 'indirect taxes' on energy will be raised


• Income tax will be cut

• State assets including airports and railways will be sold off



Fact is, as Alca points out, he must do this to comply with the conditions of the bail-out.
He has four years to go before new elections, has a strong majority, did run for office on an austerity programme (although like Cameron has done a Uturn on IVA) and no constructive and feasible alternative measures have been proposed, apart from the 'Resist!' calls from the usual quarters.

Have just discussed this with our gardiner, Augustin, who shrugged his shoulders...

[Pesky Wesky]

Originally Posted by NickZ

Now think about all the families that have members who are government workers.

My husband for one.

[Alcalaina]

Originally Posted by Pesky Wesky

Does anyone any more information about this?

I thought the whole idea was to cut public sector jobs as in Education and Health, which has been happening, so where has the growth in the public sector taken place?

El número de funcionarios aumenta un 5,3% durante la crisis

[mrypg9]

As I think that criticising without alternative feasible proposals is an armchair luxury....this is what I think should hasve been announced:

A commission to be set up to review Spain's ludicrously top-heavy and overlapping bureaucracy. Sixteen Parliaments with all the attendant penpushers, 'consultants', 'advisors' etc. ....expensive and inefficient. Urgent restructuring needed.

A review of tax structure with focus on a reform of the autonomo system. The current system serves only to entrench the black economy which is itself a hige part of Spain's problem.

Reform of the country's policing structures. Too much overlap and insufficient sharing of information because of separation of functions.

A small increase in tax on foreign owners of second homes that are not their principle residence.

Some kind of 'collar' on regional spending, over which the government has little control.

And...which won't happen, sadly: a Commission set up to examine the pros and cons of Spain's remaining in the eurozone.

The measures penalising small savers should be scrapped. They are appallingly unfair. Millionaire investors get state bailouts, the less well-off get penalised (just as in the UK) . We did all the 'right' things, saved for retirement so we wouldn't be a burden on the less well-off and have seen our savings lose a third of their value, as will those in a similar situation in Spain thanks to this disgraceful attack on the prudent.


As I've said repeatedly: the first task is to release the grip of the markets from the national economy.
The second task is to set up mechanisms to ensure it never happens again.