The cutbacks are to blame. Plus, the half point that the EU cut from Rajoy's 5.8% GDP/debt ratio proposal is going to force the Spanish government to delay meeting promises that it made about tax. These promises were made to to self-employed workers and small and mid-size companies.
Specifically, changes to tax contribution and Social Security accounts will be delayed.
In regard to the tax compensation accounts, Prime Minister Rajoy, in his inauguration speech, promised to
"establish an automatic payment procedure similar to the tributary checking account for any type of debt that Public Administrations owe citizens or companies."
However, at the moment of truth, and there are no changes at the last minute, this autopayment will be limited to debts with the Agencia Tributaria, Spain's national tax service.
This is a significant disappointment according to a manager of a self-employed worker collective. The change is similar to what was just announced about the VAT tax modification, where extensions to tax payments were granted exclusively to Administrations, ensuring that tax payments will be ahead of the rest of the invoices.
