The third Cabinet of Spain, also called the Council of Ministers or Consejo de Ministros in Spanish, has generated big expectations. But recently it has disappointed. Many predicted that the Cabinet would roll out a package of new and hard-hitting measures designed to finalize a tax increase and other initiatives that were introduced a week prior. Yesterday, the new Cabinet dropped the ball. It announced a simple action plan, but mentioned few details about the measures it plans to enact. Among other things, it was anticipated that the government would announce loose plans to develop an anti-fraud plan that will limit the use of cash.
Because of doubts plaguing the financial sector, the government mentioned plans to solicit detailed information about executive pay within the bailed-out savings banks. It would then submit this information in reports to the Bank of Spain. We will have to wait further still to know what plan it will use to combat the banks? exposure to the housing market and toxic assets.
Rajoy's cabinet is also working on a project that requires regional governments approve their budgets with the federal government. The project riled up politicians in Basque and Catalonia because it will not shape up until March. That said, people are not ignoring how it will eventually be incorporated into Spain?s legal system.
To all of this we must add the notion that the prudent notion to abolish organizations, foundations and a public regional government consortium was left in the hands of a disorganized group, the Fiscal and Financial Policy Council (Consejo de Politica Fiscal y Financiera in Spanish). After a tax increase that was in fact explained the projects that the government announced yesterday were described too vaguely, which hinders an accurate assessment of their suitability and an accurate calculation of what effects they might have.