Those who read The Wonderful Adventures of Nils by Nobel Prize-winning author Selma Lagerlöf's as a kid may remember the passage when Occa, the leader of the gang of ducks that he is leading north to Switzerland speaks to Martin, a straggling duck that has recently joined the group. Martin is straggling because he is used to an easy life on the farm and out of shape. But Occa says that even if he is tired, he should fly higher and faster in order to catch up with the others.
Angela Merkel resembles the fictional leader Occa, and Spaniards the straggling duck Martin. We have to make more sacrifices immediately in order to restore balance and avoid EU intervention. Two tools are necessary: the 2012 National Budget that Congress unveiled yesterday and completing financial reforms before summer arrives. Completing these tasks quickly is critical for solving the problem, but also because citizens finally have their feet on the ground and are ready to number of sacrifices needed to get out of the current crisis.
The most important aspect of the 2012 National Budget is that it changes the tendency that has been followed until now. That is to say, not meeting objectives and increasing deficits and debt. In relation to our level of debt, people typically argue that it is not the highest in Europe, but that is no excuse because our deficit is currently the highest. Both are related, because when the deficit rises, we go further into debt.
The volume of interest paid on debt rose to 28.848 billion euros, which is 7.200 billion more than in 2011 and, further, is practically the same amount allocated to unemployment loans (28.805 billion) and the total amount of cuts made in the National Budget for this year. If we don't break the current trend and balance public accounts, the better part of Spain's revenues will go toward paying interest on debt and dampening the consequences of an unsustainably high unemployment level.
The government predicts that 631,100 more people will lose their jobs this year. The rising unemployment is corroborated in Social Security's lowering the amount of expected revenue in their budget, because Social Security contributions are falling for those who are working and those out of work as well. Fewer people will be on the job, and the number of unemployed workers who exhaust the welfare service will rise.
The government should also keep a close eye on town councils and regional governments. For these bodies, the government has followed a carrot-and-stick policy: give them money in their budgets (8.455 billion are available should they need it), but reserve the right to intervene and cut funding for those who do not meet comply. The EU will follow the same practice with Spain if it resorts to bailout funding. Overall, budget numbers predict a hard year ahead, with reforms that should happen quick and effectively if we are to escape this vicious and ongoing crisis.
