Cristobal Montoro, the Spain's finance minister has made a liquidity
destroying proposal to tax short-term financial transactions at an
astonishing 56% tax rate. Businesses are already upset over hikes in the
VAT and have threatened to leave Spain.
Interestingly, in spite of raising taxes elsewhere, the VAT was lowered on the highly subsidized renewable energy sector.
Why? Here is the answer: "Secretary of State for Finance, Ricardo Martinez Rico, is the leading advisor in the industry".
Prepare for Spanish Implosion
Here is the "as-is" Google translation of the El Econimista article Waiting for the Intervention. Emphasis in bold not added.
Interestingly, in spite of raising taxes elsewhere, the VAT was lowered on the highly subsidized renewable energy sector.
Why? Here is the answer: "Secretary of State for Finance, Ricardo Martinez Rico, is the leading advisor in the industry".
Prepare for Spanish Implosion
Here is the "as-is" Google translation of the El Econimista article Waiting for the Intervention. Emphasis in bold not added.
The Bundesbank is opposed to the purchase of deduda, the only thing that can save Spain and Italy. Autonomy, conflict, power and government crisis rumors complicate everything.Read more at http://globaleconomicanalysis.blogspot.com/2012/07/prepare-for-spanish-implosion.html#8xIXFbpFheZPEXGM.99
The situation is out of control. The government approved last week the biggest adjustment of his story in hopes that it would serve to calm the markets. But it was not. The risk premium yesterday overcame the barrier of hundred basis points, something never seen, and the bond closed at 7.27 percent. The first question that arises is what should make efforts so painful as the increase in VAT or removal of the extra pay of officials if markets continue to punish us hard. It would be naive to think that just announced a big cut, things would begin to change. There are still many uncertainties that sow mistrust.
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