EU Commission wants further tax increases

From their ivory tower in the corridors of plenty, the European Commission has today called on Spain to further increase IVA (VAT), raise environmental taxes such as on fuel, continue reforms on labour and pensions, including raising the retirement age, and reduce the deficit of the social security system.

The recommendations appear in the second evaluation report on the bank bailout for Spain drawn up by the EU executive in collaboration with the European Central Bank (ECB) and contains the findings of the inspectors who travelled to Madrid at the end of January.

The EU commission does, however, admit that last year’s VAT increases were ‘progress’. Another criticism in the report is the time being taken by the government in setting up the required independent budget office. The EU wants to see a stricter control exercised over autonomous regions who fail to adhere to their budget deficit target.

In addition, the EU executive requests the Government to increase spending on education, labour market integration and retraining, to modernise public employment services and improve coordination between national and regional authorities.

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