Spanish cuts and tax rises

Graham_Devon

VAT to go up immediately from 18 to 21%.

3.5bn cut in local authority budgets.

Will be interesting to see how this effects the unemployment figures. The Eurocrats hail it as a victory, and the banks are already eyeing up even more money from the block based on the measures.

MacMickster

I don't particularly see how these changes will help the Spanish situation. Their chief problem is personal (rather than government) debt leaving Spanish banks facing crippling losses due to defaults and falls in property prices.

As an aside, I have just returned from a fortnight in Spain and noticed that the receipts given by a number of shops show the price of the goods in pesetas as well as Euros - at an exchange rate of 166 pesetas to the Euro.

Could this be a sign of preparations to possibly exit the Euro at some point in the future?

JasonLVC

Graham_Devon wrote: »

VAT to go up immediately from 18 to 21%.

3.5bn cut in local authority budgets.

Will be interesting to see how this effects the unemployment figures. The Eurocrats hail it as a victory, and the banks are already eyeing up even more money from the block based on the measures.

The VAT rise, it is understood, is to take effect from 01st August and the reduced rate of VAT that Spain has is also going up from 8% to 10% :eek:

Here's an interesting cut :-

"An additional 20% will be cut from subsidies to political parties, labour unions and employers’ organisations". Well that's certainly one way to save money I suppose:D

I cannot help but think that we've seen this sort of reaction before - upping taxes, cutting spending - but not sure how effective that is when the real problem is the restrictive Euro currency and money markets. At least the UK has its own currency and the markets on its side (for now).

JasonLVC

MacMickster wrote: »

As an aside, I have just returned from a fortnight in Spain and noticed that the receipts given by a number of shops show the price of the goods in pesetas as well as Euros - at an exchange rate of 166 pesetas to the Euro.

Could this be a sign of preparations to possibly exit the Euro at some point in the future?

Nah, it just shows that the Spanish and Brits are much alike - they don't like change.

The UK was supposed to stop selling fruit and veg in pounds and ounces and use the EU approved kilos but most shops still show both weights as most people equate with the 'old' weights and so I guess the Spanish like to know how much things 'really' cost. My mum still talks about how much things cost in shillings!:cool:

Generali

It looks like there's a scandal brewing in Spain over the bail out for the banks.

Apparently, savers were sold bank preference shares and were told they were a low risk savings vehicle. In many cases they are now worthless.

Some have lost their life savings.

MacMickster

JasonLVC wrote: »

Nah, it just shows that the Spanish and Brits are much alike - they don't like change.

The UK was supposed to stop selling fruit and veg in pounds and ounces and use the EU approved kilos but most shops still show both weights as most people equate with the 'old' weights and so I guess the Spanish like to know how much things 'really' cost. My mum still talks about how much things cost in shillings!:cool:

It seems that you are right. I've just checked and the conversion rate on joining the Euro was 166.386 pesetas.

It does suggest though that the Spanish people would have less qualms about leaving the Euro and reverting back to "old money" than their Greek counterparts, should the need arise.

ChiefGrasscutter

I remember only a few years ago while skiing in Austria the hotel in the resort put the prices in both in Euros and Austrian Schillings on your daily bar/extras tab to be signed for each morning.