The Bank of Spain's governor, José María Linde, challenged Finance Minister Montoro's optimistic projection for the 2015 budget. During a congressional budget committee, he warned that "there are major doubts about what impact changes to the tax system will have." Specifically, he is concerned about making enough money through tax revenues.
Linde is asking for continued growth to make sure that if Spain does not meet its budget goals, then this can possibly offset missing budget. But there is more. Governor Linde agrees that Spain is in a recovery phase, but points to stagnation in other European nations as a potential damage to Spain's optimism for growth. Thus, he has modified his prediction for growth and says that Spain's GDP will go up just 2% in 2015. Pointing to the high level of national debt and intense efforts to reduce it, Linde also insists that private debt should be cut down. This could keep credit from flowing freely, hurting small companies and export markets.
Despite a modest uptick in consumer spending and higher corporate tax rates, Linde believes that growth is not a given for the year ahead.
