The Rajoy Government did what you told them to do. To wit:
- 27bn euros (AU$ 35bn) budget cuts: 2.3% to 2.5% of estimated 2011 GDP.
- Average ministerial budget cuts: 16.9%. But public works cuts to reach 34%.
- Public sector wages and salaries frozen.
- Electricity and gas, increase by 7% and 5%.
- Housing subsidies and employment policy cuts: 2bn euros (AU$ 2.6bn).
- 12.3bn euros (AU$15.9bn) tax increases, supposedly from big corporations but including fiscal fraud amnesty fees (10% of the fiscal debt!); personal income tax (1.9% increase)
Two weeks down the road, this is what you give them in exchange:
- As we speak, the risk premium demanded to acquire Spanish bonds reached 445 basic points.
- Interest rate paid by Spanish bonds reached 6.122%.
- Luis de Guindos goes around the place to explain to you, The Markets, why things in Spain are going just fine. (See here and here)
If I were De Guindos, following Rage Against the Machine, this is what I'd tell you (yes, The Markets), the troika, Frau Merkel, Monsieur Sarkosy, Signore Draghi and the whole bunch:
I won't do what you tell me