Does it hurt yet?

[Janet]

At least in the Canaries we have IGIC rather than IVA. Spanish VAT has been put up to 21% for the mainland this morning as PM Rajoy announces the reforms that reflect the real cost for Spain of its EU bailout. So, the increase in Spanish VAT won't have an immediately direct effect on our pockets, but of course much is imported from the mainland and prices are bound to go up here as a result.

Other measures announced, too, will affect people greatly here. One such is the reduction of unemployment benefit after the first six months in order "to encourage the unemployed to look harder for work". Great if there are jobs around, of course, but not much use if there aren't. The PM seemed to consider it was commendable that the Government had not reduced the maximum 2 years allowed for "paro".

Other changes announced include the abolition of tax relief for "habitual residence", considerable numbers of lay-offs in the public service sector, the abolition of public sector workers' Christmas bonus, and "indirect taxes" on energy to go up. The total tax rises and spending cuts in this round of austerity measures - and this is still far from the end of them over the next year or several - are meant to save €65 billion, some 6.5% of the GDP. They said it would be painful, and the unemployed will perhaps be hurt more immediately than most, but this is affecting many now. JA

[Nova]

I was wondering how much of a bonus they pay to the guy who thinks up these new ways to squeeze money from the blood of the little people 

[Delderek]

At least in the Canaries we have IGIC rather than IVA. Spanish VAT has been put up to 21% for the mainland this morning as PM Rajoy announces the reforms that reflect the real cost for Spain of its EU bailout. So, the increase in Spanish VAT won't have an immediately direct effect on our pockets, but of course much is imported from the mainland and prices are bound to go up here as a result.

Other measures announced, too, will affect people greatly here. One such is the reduction of unemployment benefit after the first six months in order "to encourage the unemployed to look harder for work". Great if there are jobs around, of course, but not much use if there aren't. The PM seemed to consider it was commendable that the Government had not reduced the maximum 2 years allowed for "paro".

Other changes announced include the abolition of tax relief for "habitual residence", considerable numbers of lay-offs in the public service sector, the abolition of public sector workers' Christmas bonus, and "indirect taxes" on energy to go up. The total tax rises and spending cuts in this round of austerity measures - and this is still far from the end of them over the next year or several - are meant to save €65 billion, some 6.5% of the GDP. They said it would be painful, and the unemployed will perhaps be hurt more immediately than most, but this is affecting many now. JA

Shouldn't affect prices at all in the Canaries. Exports from Spain would be VAT free, and normal IGIC would be applied on entry. Vat is only ever charged on entry at the rate of the importing country

[Janet]

Unions  CCOO and UGT have announced general protests at the new measures. They will update as to when the strikes will take place, but say they will be before the end of the month. JA

[Janet]

The Canarian Government will not be putting IGIC up further despite the rise of VAT (IVA) on the mainland, said the consejero de Economía y Hacienda, Javier González Ortiz, who added that the regional Government had already made the necessary adjustments for the reduction in budgetary funding from Madrid. JA

[Nova]

The Canarian Government will not be putting IGIC up further despite the rise of VAT (IVA) on the mainland, said the consejero de Economía y Hacienda, Javier González Ortiz, who added that the regional Government had already made the necessary adjustments for the reduction in budgetary funding from Madrid. JA

So does that mean it's stopping at 7%?

[Janet]

yes  (well the main rate is, anyway ... the rates will remain as per the recent announcement of increases).

[Nova]

I must admit, this is a clever way of going back on your word... 

Mr Rajoy acknowledged that the VAT rise contradicted a campaign pledge made before his Popular Party came to power. As recently as January he said there was no plan to raise the tax.

"I said I would lower taxes and I am actually raising them. Circumstances change and I have to adapt to them."

The package of measures would cut the budget by 65bn euros over two-and-a-half years, he said.

BBC

[El Profesor]

The problem is that they think they are going to get more revenue ...... whereas in actual fact people will just stop buying things.

[Janet]

Unions have  announced that 19 July will be the day of protests throughout Spain against yesterday's announcement of the latest austerity measures. "Civil society", including cultural and social organizations, has been called to join the workers' demonstrations to produce a massive  protest against the Government's measures. The Unions say that that over the coming months, moreover, they will be consulting with the public about what they call "an authentic political fraud" by a Government passing measures that were not presented at the election, and warned of the "dangerous road" being taken, which they see as increasingly authoritarian and undemocratic. JA