"The hard realities hitting the global economy during the past several weeks have made it clear that market confidence will not improve by prosaic speeches alone. Greece and Italy are prime examples. Now nobody believes the vows of austerity that politicians are reciting. Investors are demanding concrete action. So if the PP wins the November 20 elections, it will have to act rapidly and with impact, applying clear-cut measures." These thoughts come from an economic expert that Partido Popular leader Mariano Rajoy has hired to determine what priorities the party should address when it takes power at Moncloa. The goal is to straighten up Spain?s trajectory in as little time as possible.
Proposals are on Rajoy's desk given that he is predicted to be Spain's next president. One proposal in particular stands out: to create a tax adjustment equivalent to 2.5% of Spain's annual GDP and estimated at 25 billion euros. The adjustment would be focused on infrastructure spending. Investment in this area has already endured cuts in recent years.
In 2010 the government dedicated more than 21 billion euros to infrastructure projects either directly or indirectly through public companies like Adif or Aena. In 2011 this figure dropped sharply to 14.6 billion euros.
Still, the Partido Popular's advisors have suggested that Rajoy keep investors in mind when advocating for this cutback. Specifically, they are noting the possibility of opening a debate about health care co-payments, a financing formula that continually enters the fray and that in other troubled countries has already been initiated or applied.
