Experts have surrendered the battle. Spain will not meet the EU's mandate to trim their national deficit to 6% of the GDP. Instead, they will end up with an 8% deficit, which complicates account renewals for upcoming fiscal years and invites new rebukes from the market. The federal government's consensus macroeconomic view is all rhetoric and no reality. The GDP prediction will not be met due to a worsening economic situation.
Revenues will not be able to pay off the shortage. Especially when the CCAA's accounts and the town councils will magnify their red numbers by 1.5% or 2% according to studies. Social Security and some public administrations will add logs to the fire, not to mention to the outcrop of other deficits hidden by smaller units of government.
Considering this past year's spending, the government has already surpassed the projection that it would reach 6% and it does not look like a month and a half's time between now and elections or Plan E can help. Further, part of the unbalance in our accounts is structural and difficult to set straight.
The government that takes office after November 20 will face more difficult challenges. Talking about tax hikes does not sound good in campaign rhetoric, but the reality will appear sooner or later. Analysts cannot picture another way to bail us out of an increase to the VAT tax, a redefinition of the Impuesto de Sociedades or a fiscal reckoning. Even then, we will continue at the mercy of the weights added by the profligate CCAA, which the IMF and ratings agencies have pointed out.
