Tax reforms will overhaul systems at the national, regional and local government levels. Because these reforms are having an impact on tax revenues, we must remember that the government's debt and deficit issues have not been straightened out yet.
Further, leaders from the Finance Ministry said yesterday that they survey that they helped elEconomista put together, which Public Administration Minister Antonio Beteta also participated in, will be delayed several years. One of the lessons we have learned from this crisis is that we need tools that help investors and consumers access markets during tough times as much as boom times. Toward this goal, Finance will propose a new credit system that coordinates both national and regional debt in a way that increases the market's confidence that loans will get paid back in a timely way. Also important, the measure will open doors to less costly debt. The tool seems consistent with Spain's former position that EU member states should share debt. Angela Merkel rejected the proposal at the height of the sovereign debt crisis because she feared a backlash during her re-election campaign. Now, the idea is still out there.
In Spain, the Regional Government Liquidity Fund and a national service provider payment plan, which pumped 70 billion euros into the regions, are laying the foundation for a new financing system that should not be seen as a recovery fund even though specific budget restrictions will fuel cheap debt and make people confident that the loans will get paid back on time.