![]() Rising interest rates and inflation have also led to a 4.5 percent fall in purchasing power between 20, while average outstanding debt rose by 65 percent between December 2021 and April 2023, the Bank noted. At the start of July, the Bank of Spain reported that almost one in ten (9 percent) Spanish households could not cover their basic expenses of food, rent, bills and debt repayments in 2022 (the latest year for which figures are available)-equivalent to 1.7 million households. The attacks come as the cost-of-living crisis continues to have a crushing impact on the working class. In its 2023 Country Report, the EC raised “concerns” about Spain’s public health expenditure, stating that “Public spending on health is projected to increase by 1.3 percentage points (pps) of GDP by 2070 (compared to 0.9 pps for the EU overall), raising long-term fiscal sustainability concerns.” The EU has already pointed to where some of the cuts should come from. What is being demanded is a massive programme of austerity which will see the decimation of public services and a steep decline in living conditions for Spanish workers. The next Spanish government will have to present their 2024 budget plan to the EU by the autumn. In total, this could mean cuts of between €20 and €30 billion next year if Spain is to meet the EU’s spending obligations. Spain’s deficit is predicted to stand at roughly 4 percent by the end of 2023, while government debt is at an enormous 113.2 percent of GDP. Sanctions are applied if EU member states have a deficit exceeding 3 percent of GDP or public debt exceeding 60 percent. The withdrawal of these programmes, estimated to cost around 0.6 percent of GDP (roughly €8 billion), will lead to a massive increase in energy bills for most households, even as energy companies continue to make record profits.įrom next year, the EC will reactivate its debt and deficit limits, which were suspended during the first years of the COVID-19 pandemic. ![]() ![]() This is equivalent to budget cuts of almost €10 billion.īrussels has insisted that subsidies introduced in 2022 as energy prices soared-including reducing VAT on electricity and gas and providing income support to poorer households-be scaled back by the end of 2023 and completely scrapped in 2024. In May, the European Commission (EC) demanded that Spain reduce its deficit by at least 0.7 percentage points in 2024 and ensure that growth in public spending does not surpass 2.6 percent. In this photo provided by the Ukrainian Presidential Press Office, Ukrainian President Volodymyr Zelenskyy, right, and Spain's Prime Minister Pedro Sanchez greet each other in Kyiv, Ukraine, Saturday, July 1, 2023. ![]()
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