More voices are speaking up for an agreement to revitalize growth and create jobs. The Royal House of Spain publicized over the weekend that King Carlos I was going to join the effort after speaking with the Prime Minister Rajoy and opposing party leaders. Weighing in on the country's economic crisis would improve his image and regain a practical role in government. A pact is needed to carry out necessary structural reforms.
This is true for the country's Public Administration reforms, which will be impossible without an agreement among various political powers that govern across different administrative levels. This reform involves reducing government size, consolidating municipalities, cutting redundant government jobs and eliminating public companies. These changes will help slash Spain's structural deficit. A broad consensus is also needed for zoning changes.
Everyone getting their share is not a valid option. The time has come to do the hard work in Catalonia and the Basque country, which have very different sentiments compared to other regions, and to establish a financing system that is responsible with its profits and spending.
But a pact to increase taxes is not necessary, which is a political decision that the government ought to take on without dipping into tax revenues. It remains to be seen whether an agreement is still possible. Rajoy's does not seem willing to push for an agreement, although negotiating with Rubalcaba is even more difficult as his is on shaky ground within his own party and busied with improving his public image. There is not much time left in Rajoy's term in office, and without reforms will be condemned to years of slow growth and unemployment.
