AP - The Spanish government approved new austerity measures and a limited economic stimulus package to ease investor fears about its debt — and insisted again it was taking strong steps to right its ailing economy.
Fiscal deficits continue to mount in Spain in spite of austerity measures and tax hikes. Spain desperately needs work reforms, but on that score there has been little progress.
Instead, the government keeps hiking taxes to combat ballooning deficits, only to see further declining revenues in which the government hikes taxes again and again in an absurd attempt to make up for those shortfalls.
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
The Financial Times reports Brussels hit by strike as EU leaders meet.
A general strike brought widespread disruption to Belgium on Monday, as European Union leaders arrived for a summit in Brussels with a focus on boosting employment across the region. Trains, shipping, air travel and public transport were all hit by the trade union action, called in response to reforms enacted hastily by the new government of Elio Di Rupo.
Japan's Cabinet has approved a 422.6 billion yen ($5.3 billion) economic stimulus package, hoping to fend off recession amid mounting signs of a faltering recovery in the world's third biggest economy.