The United Kingdom has just announced a post-lockdown plan to revive its economy which eliminates or lowers several taxes as well as including measures to fight unemployment, especially that of young people. This same week, Germany and Italy have announced actions ranging from VAT cuts to boosting purchases of consumer durables to a plan for SMEs and families that does not exclude those on high incomes. The UK, Germany and Italy, three countries with governments which are very different ideologically, do not do this on a whim, but in view of the fact that the economic crisis can be approached in different ways. They have chosen to leave the largest possible amount of money in the hands of individuals so that the economy is not paralyzed and the economic wheels continue to turn. You can also resort to deficits without increasing taxation. Europe is recommending something similar to countries right now while they get ready to tackle different reforms depending on the situation of each economy in 2020 or 2021.
Spain, on the other hand, has chosen to take the opposite path and from day one has announced tax rises, as part of this kind of political-electoral magic whose gospel says that for the interests of the left it feels best to increase the tax burden and, on the other hand, the right must always be in favour of reducing it. Both will defend their fiscal and economic growth proposals tooth and nail - and with a lot of demagoguery. We have seen it in the past and will see it again in the future.
It is possible that the tax increases seem glamorous to some, thinking that it will be the rich who end up paying the most. A fallacy, because if we talk frankly and go beyond anecdotes, the wealthiest stay outside any tax increase as they already have their own deductions in place as well as a whole system of financial engineering at hand allowing them to escape the problem of the commons, suffered by the mortals.
Britain's Chancellor of the Exchequer, Rishi Sunak, has just announced in the House of Commons that, in addition to an ambitious youth employment plan, housing tax of up to 555,000 euros will be wiped out and VAT will be reduced from 20% to 5% on tourism, leisure and hospitality, and discount vouchers for the month of August will be issued for everyone who eats away from home. In Spain that tax is at 10% and the promise of a tourism VAT of 4% has been left floating in the air like so many others. Although Germany plays in another league and its reserves are not the same as Spain's, the standard VAT, which was at 19%, has dropped three points - in Spain it is 21% - and the reduced level in German has been slashed by a further two points, bringing it to 5%, while in Spain it is 10%.
Pedro Sánchez met this Wednesday in Madrid with the Italian prime minister, Giuseppe Conte - who presides over a pro-European and Social Democratic government - and, although the two seek to form a common front to defeat the northern countries' demands and try and obtain EU help quickly, with few conditions and if possible as aid and not as loans, their respective approaches to overcoming the crisis are different.
The Spanish government has a different recipe. It is like those people who find themselves alone on the road yet with heavy traffic the other way, and idly wonder why it could be that everyone else is heading in the opposite direction.