At a luncheon organized by KPMG and Europa Press, the Spanish Minister of Industry, Energy and Tourism, José Manuel Soria, said that “there is no provision” on the table of the Government for a VAT increase for the tourism sector next year.
Soria explained that if a tax increase were to be carried out, they would have to consider the impact it would have on all sectors of the Spanish economy, including tourism. He insisted, however, that at this time this measure has not been raised. Continuing on the subject of taxes, Soria acknowledged that, although there was a Government commitment to reduce taxes in the tourism sector, the current situation does not permit this measure to be carried out.
In relation to some of the problems facing Spain, the Minister of Industry indicated that the rise in the risk premium, and even the evolution of the stock markets, are more affected by what is happening with Greece than by the adjustments undertaken by the Spanish Government. In addition, Soria said that while the evolution of the stock markets and the prime risk are “relevant” indicators, they should be of concern in “relative” and not “absolute” terms, and he is convinced that the situation will improve as soon as the ongoing reforms begin to take effect.
Commitment to the euro
With regard to the European environment, Diario Sur reported that Soria warned that the departure of Greece from the euro would be, in his opinion, “extremely damaging”.
The Industry Minister said that the Government of Spain has made a “commitment to the euro”, which involves “significant” budgetary discipline, macroeconomic stability and structural reforms, and which can place Spain as a “paradigm”. In addition, the Minister has asked the ECB to play a more active role as the monetary authority, in order to resolve the crisis.
Soria, while stating that the Spanish Government has taken charge of the situation, stressed that the Government knows the “recipes” which need to be applied though, he pointed out, they would have no immediate effect.
“The only way back to the path of growth, prosperity and employment is that of fiscal consolidation and reforms,” Soria added, and described the challenges facing Spain as “colossal”.
“The dimension of our challenges as a country and as a nation is only comparable to the political and economic transformation that Spain lived through in the transition,” he said.
Soria clarified that the initial situation was not “as expected”. Thus, compared to the former government’s projected deficit of 6%, the final figure was 8.9% in 2011. “Having met the budget deficit target, with the adjustment approved in December by 15,000 million, it would have been enough to meet the target of 4.4% originally planned for 2012,” he added.