The government continues to face problems that could prevent it from meeting its deficit goal. Yesterday, August economic figures were published, and although the deficit imbalance, and even though it has barely increased since July, it is still 23.8% more than at this point last year.
Spain hopes to increase revenues by increasing VAT and corporate tax rates, which will not go over well given Spain?s ailing economy. Plus, the Social Security system continues to struggle to pay retired citizens. It has already received 85% of state fund transfers and now has to face a pension payment spike at the end of the year.
Regional governments might not meet their deficit goals either. The only solution is to push reforms along so that that go into effect as soon as possible.
