Yesterday Spanish Prime Minister Mariano Rajoy said that he will ratify an increase to Spain's personal income tax, which according to him was "a tough, painful, absolutely necessary, but just and fair decision." "No other options were left," said Rajoy in the first interview he has granted to the news wire service Efe since becoming Prime Minister. He openly admitted that raising taxes was not in his plans during his campaign or even as late as his inauguration speech.
That said, Rajoy stood behind his belief that raising taxes was "fundamental for boosting Spain's credibility and for allowing us to find financing outside the country" after he learned on December 27 that the state of public accounts were lower than expected by two percent of the GDP.
In an afternoon meeting with the Grupo Parlamentario Popular, Rajoy posted his team about the difficult situation that the Spanish economy is facing and explained to them that the national debt for 2011 will be "greater than eight percent" and, therefore, more than two percent higher than predictions made by the former socialist party government. Minister of the Interior Jorge Fernández Díez cited the newest predictions last week at 8.2%.