Once again there isn’t much in the news about Spain other than the bailout so here is a quick overview of what has happened this week.
Hundreds of miners marched in Madrid to protest over a government decision to cut subsidies to the mining sector by nearly two-thirds next year.
Several of Spain’s autonomous regions are at risk of over-shooting their budget-deficit target of 1.5 percent of GDP this year. Budget minister, Cristobal Montoro said yesterday that they have been given one week to take corrective measures.
EU leaders agreed to lend 100 billion Euros to Spanish banks and also to direct it to them, rather than add to the governments debt. Some of the nations involved are looking at taking shares in the Spanish banks as extra collateral.
Rajoy announced that one of the conditions attached to the loan was that he must raise sales tax (IVA). The troubled PM announced to his MP’s that an increase of 3% would be applied bringing the standard rate up to 21%. The reduced rate of 8% for public transport fares, processed foods and bar/hotel services will increase 2 points to 10%. So again, the public are paying for the governments mistakes.
Another condition of the loan is to implement a further 65 billion euros of austerity measures and subsidy cuts.
“We are living in a crucial moment that will determine the future of our families, our youth, our social welfare and all our hopes,” Mr Rajoy said.
“That is the reality. We have to get out of this mess and we have to do it as soon as possible.”
I don’t know why he thinks pumping money into the banks will help anyone, other than the banks. Leaders across Europe are making the same mistake and they will all pay for it at their next elections.
The way the public see it is that if a person robs a bank they go to prison but if a bank robs the people they get bonuses! It has to stop. The banks took our money and lost it, we bailed them out with billions of taxpayers euros yet still they fail and still they refuse to lend and still a quarter of the country is unemployed.
Wake up Rajoy! Concentrate on the people. It is them who will vote you out, not the bankers.