Op-ed: Tax debate red hot

Economic growth is central to the Spanish government's tax strategy. Rajoy and his Cabinet agree that any increase to taxes covered in the 2012 National Budget should not exacerbate the country's already feeble consumption level.

Raising the general VAT has been ruled out, but the reduced VAT might go up. The IRPF has already been raised. All that remains is to figure out is what deductions will still apply for corporations. In regard to combustible fuel taxes, raising them will negatively impact consumption.

Ultimately, Montoro will have to raise taxes and cut spending in order to square public accounts.

Adjustments cannot be executed successfully with mere cutbacks, but through structural reforms to public spending. That?s the best solution.