Economic Policy in Spain: Who´s Really in Control?
12/03/2014 | Daniel Álvarez Carrera (Alumno UC)
In this essay, I’m going to talk about the economic policy applied in Spain. I’m going to differentiate between monetary policy, fiscal policy and foreign policy.
When we talk about monetary policy, we refer to price stability. The countries try reducing the inflation but they don’t want incur in deflation because both situations are harmful to the economy. In Spain, the ECB is the organization in charge of making decisions about monetary politic because Spain is in Eurozone. Currently, the inflation in Spain is low (0.2%) due to a reduction in interest rates. The government believes that this situation is not worrisome and is derived from its policies.
On the other hand, the fiscal policy is related with taxes, debt, treasury and T-bills. In Spain, the government has increased taxes because they think that they can use this to obtain more income. However, I think and the economic data show that this policy is mistaken because Spanish people consume less because of the increase in prices. Therefore, Spain’s government will receive less tax revenue. Moreover, with respect to the debt, the fiscal policy in Spain is functioning correctly because in this year (2013) Spain has almost achieved 100 % of its debt emission target.
Lastly, the foreign policy in Spain is also good because exports have gone up in last few months. This situation is due to a reduction in the price of products. In last few years in Spain, due to the bad economic situation, the political measures have achieved that the companies fire employees in order to reduce costs. As a result, the prices are low and other countries buy our products. This policy is camouflaged by the government saying that Spain is now competitive. But I think that these actions are damaging to people because they have lost their jobs.
Finally, I think that Spain has little power over its own economic policy because it is the European Union who makes important decisions about the economy in Europe. Moreover, some countries like Germany and its policies control the European economy according its interests.
Nota: Este artículo ha sido elaborado por Daniel Álvarez Carrera, alumno de la Universidad de Cantabria, como una de las actividades enmarcadas dentro del programa de capacitación lingüística, dando su permiso para la publicación del mismo en FxM.