The government has carried out significant reforms in the public sector, but they will only have around a 1.5% impact on GDP. Spending will be nearly 42% of GDP in 2016, which is the same level that González left (43.2%), only three tenths below Zapatero (45%) and far from Aznar (38%).
Prime Minister Rajoy has not met his promise to cut spending to 37.7% of GDP. Unfortunately, he missed a major opportunity that is unlikely to return because he won't have the majority he needs to overhaul the public sector into a modern and efficient government that is capable of generating the kind of revenue that we have the potential to generate. Tax reforms will fall short if they are not accompanied by solid administrative reforms, because elections are just around the corner.
