In return for granting Spain an extension on meeting 3% deficit threshold of the stability act, Vice President of the Commission responsible for Economic Affairs, Olli Rehn, said Wednesday it is "crucial" that Spain and other countries that will benefit from an extension to correct its excessive deficit in return accelerate reforms to improve competitiveness.
Specifically Rehn Requests
- Pension reform
- Labor reform review
- Increase in the VAT on certain products and fuels
- Elimination of income tax deductions on individuals and corporations
The above via google translate from La Vanguardia.
I can certainly agree with point number one. But what's with a "review" on labor reform rather than action?
Points three and four are inane. Demanding tax hikes in the middle of a depression is economic suicide. Yet, Rehn wants a hike in the VAT and tax hikes on individuals and corporations.
Spain (the world in general) needs lower taxes and less government, not the opposite.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
