This week the government will publicize its working plan of the 2013 national budget and several reforms that it plans to put into effect.
At this point, it needs to assess how liquid public accounts will be at the end of 2012, which is a key figure for being able to create next year's budget.
The first thing to figure out is if Spain can meet this year's deficit goal, becuase most analysts think that it is going to be really difficult for the deficit to fall beneath 6.3% of GDP. As the crisis worsens, tax increases are not producing the desired results, Social Security is experiencing funding problems, and according to data from the first two quarters will barely scrape by.
So the solution is not to raise taxes more, as Rubalcaba suggested. Nor is it to continue with cutbacks that, like patches, are temporary fixes. The only way to stabalize the national accounts and galvanize growth is to complete the strucural reforms that the government publicized in a schedule of all reforms it plans to carry out. That is what the EU has asked for.
That said, some reforms have yet to receive a deadline. The most important of these is a reform of all public administrations. This reform has experienced continual delays, mostly because it will be hard to carry out. But that?s no excuse. It must be done. Equally, the 2013 budget ought to help Spain reduce its deficit and get out of the crisis.
