Spain, already in a second recession due to the utter failure of austerity, has decided to double down an what hasn’t worked. From the AP:
Wednesday’s increases in sales tax include a 3 percentage point hike on products and services like clothing, cars, cigarettes and telephone services to 21 percent and a 2 percentage point increase on goods such as public transport fares, processed foods and bar and hotel services to 10 percent. The sales tax on basic goods like bread, medicine and books stays at 4 percent.
Other measures outlined Wednesday included:
—€660 million of cuts in government spending beyond the reductions already outlined in the 2012 budget
— wage cuts for civil servants and members of the national parliament
— further closures of state-owned companies
— tax deductions for homeowners to be scrapped
— a 30 percent cut in the number of town councilors
— slight reduction in unemployment pay, designed to encourage jobless people to seek work more quickly.
— 20 percent cut in government subsidies to political parties and labor unions.
— possible privatization of ports, railways and airports