Spanish businesses sent their disapproval of the government's policies to the CEOE manager meeting yesterday. Some of the comments ("We have the government that we have...the tax policy is in taxpayers' hands") recall the comments made about other areas of Spanish policy lately.
The businesses feel that the effort being carried out is not bearing fruit because debt and unemployment are rampant. Many businesses are struggling every day to get credit to run their businesses. The survival of these small- and medium-sized businesses, which comprise 98% of all Spanish corporations, becomes more difficult every day. Many times, the fund shortages lead to layoffs. The businesses don?t see any improvement for their situation and believe that the Government won't be able to meet its deficit goal.
According to the CEOE, 2012 public accounts are out of balance by 6.9%, which is six tenths of a point above the 6.3% that Spain agreed to meet. The recession will continue into 2013, yet the recovery could start at the end of next year. Unemployment is now at 6 million people. Employers organizations think that it is a priority to restructure the financial sector, and they are urging the government to undergo a deep structural reform to the public sector despite the higher taxes this would bring.
It's inevitable that Spain will need a bailout. The businesses are righ to demand that the government create a program for getting Spain out of crisis. Such a program would coordinate tax policies with spending cuts and other reforms that are necessary to do away with high deficits.
If pending reforms aren't carried out, all the effort will be worthless and hte current pessimism would be justified.
