[DBMarcos99]

Rajoy’s made his investiture speech, and the full text (in Spanish) is here

http://www.elpais.com/elpaismedia/ultimahora/media/201112/19/espana/20111219elpepunac_1_Pes_PDF.pdf

A summary of his financial reforms (again in Spanish)

http://www.elblogsalmon.com/economia/mariano-rajoy-en-el-debate-de-investidura-detalle-de-reformas-que-se-pondran-en-marcha

According to this report, entrepreneurs will be the priority in his reforms. Let’s hope so!

http://www.itespresso.es/los-emprendedores-prioridad-en-el-programa-de-reformas-de-rajoy-57786.html

Not too many English articles as yet, just this overall summary from the Beeb (very little of any substance as yet here)

http://www.bbc.co.uk/news/world-europe-16248432

If I spot any other articles in English (I’m searching on Twitter for relevant links using the keyword “Rajoy”) I’ll link here.

[DBMarcos99]

One of the first real summaries of his speech I’ve seen in English

http://www.reuters.com/article/2011/12/19/spain-rajoy-idUSL6E7NJ1J320111219?feedType=RSS&feedName=marketsNews&utm_source=dlvr.it&utm_medium=twitter

Rajoy began his address with dire warnings for the struggling economy, which is believed to have already fallen into its second recession in three years as domestic demand flags and export growth slows.

He said he would implement a hiring freeze on most of the public sector and announced detailed spending cuts on Dec. 30. He also said the corporate tax regime would be overhauled to stimulate business.

Rajoy said if Spain met its public deficit goal of 6 percent of gross domestic product in 2011 — which most economists say is unlikely — the Treasury would need to find 16.5 billion euros in savings next year to meet the next target.

[DBMarcos99]

It seems that Rajoy intends to continue with the reduced rate of VAT on purchasing a house (good news for us buyers). But he’s going to snatch that money back from the IRPF – that’s income derived from renting out? (not so good obviously for those renting out holiday homes)

http://www.elperiodico.com/es/noticias/politica/rajoy-recuperara-deduccion-por-compra-vivienda-1278256?utm_source=dlvr.it&utm_medium=twitter

Edit: I think this is the measure that will concern ex-pats and property owners the most here?

[DBMarcos99]

An article here from the IrishTimes

http://www.irishtimes.com/newspaper/breaking/2011/1219/breaking38.html

Mr Rajoy said if Spain met its public deficit goal of 6 per cent of gross domestic product in 2011 – which most economists say is unlikely – the Treasury would need to find €16.5 billion in savings next year to meet the next target.

He said he would implement a hiring freeze on most of the public sector and announce detailed spending cuts on December 30th.

But Mr Rajoy outlined some immediate tax benefits for companies in order to boost employment and demand.

Small companies and the self-employed will not have to pay taxes before clients have paid them, as they currently do.

Firms that make their first hire will get a €3,000 euro tax benefit, and corporations with less than €5 million in revenue will be put into a more favourable tax bracket.

Another business-friendly measure he announced was to move public holidays that fall in the middle of the week to the closest Monday or Friday. This should discourage people from taking more time to stretch the holiday.

He also said banks must sell off billions of euros property assets – the hangover from a building bubble that burst in 2007 – and then be recapitalised.

So, an end to the puente! 😕

[logan]

Thanks for those links Marcos. Most of these plans have been trailed before but at least Spain now has a business friendly government.
Perhaps the turn around starts here, at least the Socialist are now gone for a generation. 🙂
The sell off of the banks real estate assets is a move much needed but I notice he does not say how he is going to fund it or recapitalise the banks. The devil is always in the detail.
Little bank real estate is desirable but if it’s cheap enough there are some opportunities. However most investors just hate the idea of any Euro capital investment at the moment.

Quote: The banking debts have been hidden and we don’t yet know how much this will cost the government.”

http://www.telegraph.co.uk/finance/financialcrisis/8966874/Spain-grits-teeth-yet-again-as-austerity-deepens.html

The Madrid property consultants RR de Acuna predicts that prices will have to fall another 20pc before the market clears an overhang of one million homes.

[DBMarcos99]

Thanks for those links Marcos. Most of these plans have been trailed before but at least Spain now has a business friendly government.

Yes. I was very sceptical about Rajoy, but so far he’s shown he knows that the country needs growth as well as cutting back on debt/spending. Not an easy combination to pull off. His measures to help businesses (eg only paying tax when payment is received, tax relief for taking on a new worker etc.) show he’s not just going to cut everywhere and just hope the private sector picks up. But he has a lot of painful stuff to impose. The first few months will give us an indication whether he’ll have the drive to push it all through. I had thought, based on his record of publishing little regards economic policy for the last few years, that he was incapable of determined action, but we’ll see. Early signs are hopeful.

[GarySFBCN]

Good to have the wolves guarding the chicken coop. If our experience in the US is relevant, say goodbye to the middle class:

“Spain’s new conservative Prime Minister Mariano Rajoy has named his new cabinet after being sworn into office. Luis de Guindos, a former Lehman Brothers executive, will be economic minister, while Cristobal Montoro was appointed treasury minister.

http://www.bbc.co.uk/news/world-europe-16295059

[Anonymous]

the middle class have had the breath squeezed out of them; the lucky ones still with jobs are teetering on the brink – (oversize loans and reducing salaries); wait until the new gov start tinkering with the labour laws; all those long holidays, time for for private affairs and those ridiculous severance pay packages (45 days per year worked) OUCH !!!!

the socialists have reduced spain into a country of the masses who dont have a penny and the rich (a la south america!!!) 😆 😆 😆 😆 😈 😈

[logan]

What’s the matter with Spain?
http://www.bbc.co.uk/news/business-15734280
I deadly combination of private debt, overpaid over protected workers and cheap money. Add to that political leaders and central bankers who sat on their hands and watched it all happen instead of acting decisively.
Zapertero was not the only one, Bush, Blair and Brown all did the same. Failed politicians should be held to account.

[Anonymous]

@logan wrote:

What’s the matter with Spain?
http://www.bbc.co.uk/news/business-15734280
Failed politicians should be held to account.

Along with gambling bankers, financial people , etc . Then , if guilty stripped of everything .

[DBMarcos99]

http://www.tax-news.com/news/Rajoy_Sets_Out_Spains_Fiscal_Plan____53072.html

Spain’s new Prime Minister, Mario Rajoy, has promised additional tax benefits for small companies and business which hire new staff as the incoming centre-right government faces the onerous task of keeping Spain out of recession while accelerating budget deficit reduction efforts.

Under the plans, outlined in Rajoy’s first speech to parliament since his landslide electoral victory last month, small companies which take on their first employee will receive a EUR3,000 (USD3,900) tax credit. Additionally, companies with a turnover of less than EUR5m per year will pay less tax.

Rajoy said that a raft of new fiscal measures will be approved by the cabinet on December 30. A comprehensive budget for 2012 will then be passed by the end of March next year. It seems that the vast majority of the budgetary savings needed to meet new deficit reduction targets will come from deep cuts in public spending rather than increases in taxation however, with Rajoy telling the lower house that it was inappropriate to raise taxes, especially on small companies, with the economy facing such difficulties.

The government needs to find some EUR16.5bn in savings in the upcoming budget to reach a revised deficit target of 4.4% of gross domestic product in 2012, provided this year’s target of 6% is hit. However, despite analysts’ approval of Rajoy’s proposals, which include plans for reform of Spain’s rigid labour market laws and a restructuring of the banking sector, most agree that this target is somewhat ambitious given non-existent economic growth and an unemployment rate exceeding 20% – the highest in the European Union.

Again, I like the way he’s trying to alleviate tax on small companies.

[Author]

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