Pensions, scholarships and debt interest. These are the only values that will increase in the Financial of 2013 approved yesterday by the Spanish government. But what is most surprising is that the austerity measures and tax increases will not reduce public spending in 2013: they are barely enough to pay the interest on the public debt. The Minister of the Public Budget, Cristóbal Montoro, acknowledged that interest will increase by 34% to 38,6 billion. To reach the objective of a deficit/GDP ratio of 3,8% in 2013, public spending will have to increase by 5,6% compared to 2012 (about 169,7 billion euros). Even excluding transfers for welfare and public administrations, public spending will still grow by 2,98% next year.
That the problem of the public deficit is therefore not to be underestimated is demonstrated by the fact that the extra 9,742 billion in interest that will be paid in 2013 far exceed the 3,883 billion that will be obtained from the cut to the Ministries or the 6,9 billion that Madrid expects to obtain from the VAT increase. In 2013, the expenditure of Ministries will decrease by an average of 12%. The wages of civil servants will remain frozen for the third consecutive year. Culture will also suffer a cut like never before in history (about 30% less).
But the news does not end here. The Madrid executive has approved 43 new laws which should allow the state coffers to be filled with another 4,375 billion euros. The reforms are aimed at increase competitiveness, create new jobs and facilitate growth and will be submitted to Parliament in the coming months. Among these, a new law for the electricity sector stands out, one for telecommunications and the revision of the holiday calendar. As regards the markets, an institution will be founded guarantor of the Unity of Mercator to ensure the free movement of goods and provision of services and anindependent financial authority in charge of supervising public accounts.
Minister Montoro also announced that they will be used 3,06 billion from the special reserve fund to pay pensions which in 2013 will grow by 1%. Finally, the Spanish government has maintained its forecast of a 0,5% drop in GDP in 2013, despite international organizations and private study services predicting a collapse of almost double.
Brussels has been enthusiastic about the reforms announced yesterday by Madrid, and above all of the 43 laws that will be approved shortly. “They include concrete, ambitious and well-directed measures,” said the vice-president of the European Commission Olli Rehn.
- investors, on the other hand, don't seem as convinced. The Ibex has been traveling in the red since this morning and at 12.30 it lost 0,98%. On the secondary market, the spread with German Bunds rhymes
