Crisis y renovación de la política fiscal española

During the last decade, the Spanish budgetary policy has been clearly inadequate. The rapid implementation of the welfare state has caused serious difficulties in the financing of public expenditure, although the ratio of total tax revenue as percentage of GDP has grown at a quick pace. The permanent resorting to public sector deficit has led to tensions in financial markets and given way to a «crowding-out» effect upon the private sector. Fiscal policy has not contributed -independently of the development of the economic cycle- to the correction of the basic desequilibria of prices and the external sector. This has in turn conditioned the behaviour of monetary policy which had to adopt an excessive protagonism in the fight against inflation. The reduction in the possibilities of performance for monetary policy puts a greater responsibility upon fiscal policy in the task to stabilize the economy, a task which cannot be implemented without deep structural reforms designed to limit the size of the public sector.