[Spain] 2016 State Budgets: electoral populism and billions for banks

Written by Corriente Roja – Spanish State
Thursday, 20 August 2015 20:37
The PP [1] anticipated the presentation of the Bill for the 2016 State Budgets (PGE) due to the hectic election schedule of the second semester. The Catalan autonomic elections on September 27, called by Artur Mas, will probably deepen even further the regime of 78’s [2] crisis and, in turn, the general election later on this year will probably mean a blow to the Spanish bipartisanship.
The government’s goals with its budget project are three: to ensure servicing the public debt, reduce the deficit in order to achieve the primary surplus targets imposed by the European Union and make small concessions to sectors of the population with an eye on the general election.
Public debt reaches 98% of GDP
Despite the government brinkmanship to sell the idea that the economic recovery has begun after years of crisis, the real life shows daily that the fairy tale of Montoro and Rajoy [3] exists only in their sick minds.
It is confirmed a budget adapted to the new age of dependence on the international banking system and on the Troika, on the one hand, and the harsh attacks on working people, on the other.
The most optimistic figures estimate that the Spanish public debt reaches over 98% of GDP. In order to pay it back, it would be necessary to use almost everything the country produces during an entire year. We are not far from Greece. This is an unpayable debt.
Only the service of the debt would reach 33.5 billion euros, 2.93% of GDP and 9.5% of the entire budget. This means that for every hundred euros spent by the government, more than nine would go directly to the pockets of the Spanish and European bankers who hold the debt securities.
It is also foreseen the payment of other debt’s services, which do not clearly appear in the budget and are included in the item overheads(48 billion) and finance charges as well as everything that the other autonomic and local governments spend on their respective debts. Around 30% out of the budget will be used to service the debt, or to pay the principal of the different loans.
Less money for assistance to unemployed workers
To get an idea, the total amount allocated to employment protection in the PGE would reach 19.5 billion euros, 14 billion less than the spending on the debt servicing. In addition, the budget for unemployment insurance benefits would be reduced by 22% next year because a significant portion of unemployed workers will lose the right to receive it. The consequence is that they increasingly depend on their families to survive. Currently, around 52% of them receive no benefits.
Public investment (infrastructure, state-owned companies, etc.) would reach 13.2 billion euros, also far below than what is spent on the public debt.
Electoral populism
In exchange for this harsh budget, the government made some minor concessions to civil servants, some tax cuts and an insignificant increase in some social welfare benefits in a desperate attempt to get votes and reverse the electoral disaster that is expected in the general election.
No to the debt payment
It is only possible to approve a social budget to reverse the situation of crisis in the country with the immediate suspension of the payment of public debt, a debt which was not taken on by the workers or the people.
The tax system, which is based on consumption taxes, divided equally among all social classes, must be changed through the creation of a surcharge system of the company profits.
This is the first step to have a social budget which will meet the needs of workers and not the interests of great capitalist owners.
[1] – PP: Partido Popular (Popular Party), the party in office.
[2] – The regime born out of an agreement between the monarchy, the bourgeois parties and the main reformist workers parties, PSOE and Communist Party of Spain.
[3] – Cristóbal Montoro: Minister of Finance and Public Administrations; Mariano Rajoy: Prime Minister of the Spanish State

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