 Image uploaded from a quicklink (Image by Unknown Owner) Details DMCA | Cash-strapped Spanish shoppers and small businesses were resigned to more pain on Saturday, as everyday living costs like heating, phone bills, clothes and haircuts all become more expensive following a hike in value-added tax (VAT). Spain is trapped in a vice. On the one hand the government must drastically cut spending and lay off public workers to show investors it can control the public deficit and try to bring down sky-high borrowing costs.
On the other hand, tax revenue is shrinking because of joblessness and recession so the government has increased taxes to try to keep the deficit in line, which in turn inhibits consumer spending and makes the recession worse. |
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At www.businessinsider.com
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