Since 2009 Spain has been trying without success to trim its annual deficit. 2012 will not be an exception according to analyst views, which predict that the country's deficit will fall seven tenths of a point below the 6.3% debt-to-GDP ratio that it promised the EU it could meet.
In other words, in order to reach this goal the government will have to cut spending by 7 billion euros. As long as Spain does not meet its deficit goal, its national debt will increase further. It looks like we are trapped in a vicious circle with no exit. But that outcome is not certain, and there is one way out.
Spain is suffering from a systemic deficit. That is to say, the economic crisis alone did not create a soaring deficit even though it did exacerbate it. Instead, the unbalanced relationship between government spending and revenues has driven us toward this point. That's why the government has been urged time and time again to conduct reforms to cut spending and increase revenues.
We need to change how our government spends by reorganizing the public administrations so that payrolls and operational costs are cut while still offering efficient services.
It is also necessary to change the revenue strategy by pushing tax reforms that do not penalize production and labor and are more efficient at persecuting tax fraud. Many months ago we said that it was time for the brave to take action instead of running for cover. Because the storm will not only sweep away the people who didn't do their jobs well, but everyone.
