The Spanish Economy Minister, Luis de Guindos, has reiterated the Government’s intention to cut taxes in 2014, combining efforts to reduce the deficit with measures to boost growth and get Spain out of recession.
In an interview with Reuters earlier this week, De Guindos said that the Stability and Growth program to be submitted to the Commission in early April shows Spain’s economic motives until the end of the legislature in 2015.
The Economy Minister said: “In 2013 the European Commission indicated that Spain did not have to take additional measures. For 2014 and beyond, Spain will have to present and discuss with their partners in the Eurogroup and the European Commission the fiscal path for the future.”
“I’m sure that fiscal consolidation in the future will be very sensible in terms of not having a negative impact on the growth outlook,” he said.
The Government of Mariano Rajoy – who beset by the crisis had to raise taxes “temporarily” after taking office, breaching his campaign promise – nevertheless has assured that it will lower the tax burden to citizens in 2014.
“There are commitments we have. We will have to combine these commitments with continued fiscal consolidation efforts. I believe it will be positive and possible in the coming months,” stated De Guindos. “The priority is to combine tax cuts with the fiscal consolidation efforts”.
De Guindos said that Spain is no closer now to asking for bond-buying help from the European Central Bank, than it was before the elections in Italy, even though they have caused great confusion in the markets. “Spain is no closer or farther than 24 hours ago,” he said.
In this sense De Guindos said that neither market jitters nor the dimmer economic prospects disclosed last week by the European Commission would divert the Government from its economic policy.
De Guindos also demonstrated his satisfaction with the reform of the banking sector which, with 41,000 million euros being spent by Brussels so far, is in its penultimate phase.
Brussels, which recognises Spain’s deficit reduction efforts, could give the country more time to meet its commitments, as recently acknowledged by the European Commissioner Economic and Monetary Affairs, Olli Rehn. Various sources estimate that in May, Brussels could give Spain one or even two years more to achieve fiscal balance.