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FISCAL POLICY IN SPAIN DURING THE CRISIS

After eruption in 2007

Treaty of the European Union...

After European Euro Adoption...

In the summer of 2007 the crisis broke

Incomes of the

Government

Government

Expenditures

The evolution of the Gross Domestic Product

Economic situation from 2002 until 2007

Due to the strong mortgage

credit growth

ONLY FISCAL POLICY

  • The Spanish economic was increasing its economic growth.
  • The rate of expenditures made by the government was positive.
  • The income of the governments were increased, but they were less than the countries of the rest of Europe.

FISCAL CONSOLIDATION: Contractionary policy

UNEMPLOYMENT

  • Process of fiscal consolidation for reducing the deficit and to control the public debt in order to rediscover growth and employment.

  • The General State Budget for 2010 was characterized for removing the expansionary fiscal policy. The budget cuts and tax increased.

Rate of Unemployment

CONCLUSIONS

RATE OF GPD

The only way to fight the economic problems was the fiscal policy.

Spain had a good position before the crisis

Period 2010-2013 Fiscal consolidation

  • Expansionary fiscal policy caused deficit and public debt during the crisis.
  • The consolidation fiscal for reducing deficit.
  • The policies have to be analyzed in each period likely consequences.

Period 2008 - 2009

EXPANSIONARY

FISCAL

POLICY

NEW

FISCAL

POLICY

Fiscal policy will be conditioned by the decision of the European Commission

FISCAL POLICY PROGRAM

  • Support measures for families and companies: Tax deduction of 400€ of IRPF and abolition of Net Wealth Tax.
  • Promotion of employment: according with the European Economic Recovery Plan: New public investments for public works for starting in 2009 with 8.000 million of euros.

Rate of change GDP

  • Support plan for the financial sector
  • Measures for the modernisation of the economy
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