Spain is still striving to receive money from the EU Recovery Fund

ALTHOUGH the announcement of the huge sums to be made available to Spain from the EU’s Recovery Fund was widely applauded, none has been received as yet and it appears that the Government will have to prove that it is worthy of receiving the funds.

The problem for Spain is that it needs the money in order to support the numerous changes and financial aid that it has included in its 2021 budget which itself assumes the injection of €34 billion from the European Union.

Already it has been made clear that the machinery behind the two major new Tobin and Google taxes which were to generate significant income for the country is lacking and this is an indication that the bureaucracy behind the Spanish tax system is due for a major overhaul.

The coalition government is committed to reform of some of the original labour laws introduced by the Partido Popular but as time passes, it is clear that PSOE and Podemos have different views on how far and how quickly these changes can go.

In a time of crisis with so many people out of work or on furlough, tax income falls and expenditure increases and, in a bid, to reduce that load, the Government is looking closely at the state pension with qualifying period to be increased and incentives given to encourage workers to continue after the age of 65.

The problem however is that with nearly four million unemployed, many of them young, blocking retirement might save expensive pensions but leaves unemployed youth which may become a social and financial burden for a future government.

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