A7: Multimedia presentation about main economic policies in your country

1. MAIN ECONOMIC
POLICIES IN SPAIN
INDEX:
● Economic Policy
● Main goals of economic policies
● Types of economic policies in Spain and their tools.
● Fiscal policy in Spain.
● Main sources of public revenue in Spain.
● Distribution of money obtained by the State through taxes,
in Spain.
● Changes in the Spanish Income Tax.
● Changes in the Spanish Value Added Tax
● Public spendin in Spain
● The cutbacks during the years of the crisis.

2. ECONOMIC POLICY
Natalia Aysun Cruz Moro
Paula Núñez Cortés

3. Economic policy refers to the actions that governments take in the
economic field. It covers the systems for setting levels of taxation,
government budgets, the money supply and interest rates as well as the
labor market, national ownership, and many other areas of government
interventions into the economy.
Most factors of economic policy can be divided into either fiscal policy,
which deals with government actions regarding taxation and spending, or
monetary policy, which deals with central banking actions regarding the
money supply and interest rates.

4. OBJETIVES CONTENTS
GENERAL WELFARE ELEVATION OF THE LIVE STANDARD OF ALL THE
TOWNSFOLK
EQUITY EQUALITY BEFORE THE LAW AND IN THE LIFE
CONDITIONS OF PERSONAL DEVELOPMENT
FREEDOM TIGHT TO MAINTAIN OPINIOS AND ACT ACCORDINGLY
SOLIDARITY DISTRIBUTION OF SINEWS WITH ALTRUISTS JUDGMENT
PEACE & SECURITY DEFENSE OF THE POSSIBLE AGGRESSIONS
RESPECTING INTERNATIONAL AGREEMENTS

5. Jaime González Gómez
Carlos Ramos Martín
MAIN GOALS OF
ECONOMIC POLICIES

6. The most important aims are:
1. Productive efficiency.
2. Distrubutive equitity.
3. Full employment.
4. Prices estability.
5. Balance of payments.

7. Productive efficiency:
The State must promote economic increase.
Increasing the production, and creating jobs will
achieve higher levels of consumption and well-
being.
It is measured by the average annual rate of
growth of GDP(Gross Domestic Product).

9. Distributive Equity.
In other words, redistribute production and
income. The free market tends to create
economic inequalities between people. The
State's involvement can correct those
inequalities.
The percentage of families with a lower than
average household income is measured by the
distribution of total disposable income.

11. Full employment:
It's an economic situation in which all available
labor resources are being used in the most
efficient way possible.
In others words, it is that situation in which the
demand for labor is equal to the supply, at the
given level of real wages. It is measured using
the unemployment rate.

13. Price stability:
Price stability is understood as the lack of
significant price changes in an economy.
Indicators such as the wholesale price index are
used to measure it.

15. Balance of payments:
It's a recording of all monetary transactions
produced between a country and the rest of the
world in a certain period.
These transactions can include payments by
exports and imports of goods, services,
financial capital and financial transfers.

17. TYPES OF ECONOMIC POLICY AND THEIR TOOLS.
Julio Javier Alonso Santos
Jorge Cabeza Bejarano

18. Monetary policy
• Monetary policy is the process by which the
monetary authority of a country, like the central
bank, controls the supply of money, often targeting
an inflation rate or interest rate to ensure price
stability and general trust in the currency.

19. Fiscal policy
• Fiscal policy is the use of government revenue
collection (mainly taxes) and expenditure (public
spending) to influence the economy.

20. Commercial and exchange policies
• A commercial policy (also called trade policy or
international trade policy) is a set of rules and
regulations that are intended to change
international trade flows, particularly to restrict
imports.
• An exchange policy is a set of rules and regulations
that are related to imports and exports.

22. Sectorial and structural policies
• Sectorial policies are created to know the
development of economic sectors and make them
get better.
• Structural policies are created with the goal of
reducing the borrowing country's fiscal imbalances
in the short and medium term or in order to adjust
the economy to long-term growth.

23. FISCAL POLICY IN SPAIN
Javier Montes Bernal
Raquel Vivas Barra

24. Definition
Fiscal policy is the use of government revenue
collection (mainly taxes) and expenditure
(spending) to influence the economy. According to
Keynesian economics, when the government
changes the levels of taxation and government
spending, it influences aggregate demand and the
level of economic activity. Fiscal policy often
attempts to stabilize the economy over the course
of the business cycle.

25. ● Fiscal policy can be complemented with the other main type of economic
policy, monetary policy, which attempts to stabilize the economy by
controlling interest rates and money supply.
● The two main instruments of fiscal policy are public expenditure and taxes.
Changes in the level and composition of taxes and public spending may
influence the following variables in the economy:
Aggregate demand and the level of economic activity.
The pattern of resource allocation.
The distribution of income.

26. Fiscal policy instruments
Fiscal policy is the use of government spending and the
collection of taxes to influence the economy..
INSTRUMENTS
Public expenditure and taxes:With these instruments, the
government actively participates in the economic decisions
of society.
Government decisions on fiscal policy are reflected in the
public sector budget. When the income exceeds the
spending there is a budget surplus, when the opposite
happens, there is a deficit.

27. Types of fiscal policy
● An Expansive Fiscal Policy means a net increase in public spending (G> T) through
increases in public spending or lower tax revenues or a combination of both. This will lead to
a larger budget deficit or a smaller surplus. Expansive fiscal policy is usually associated with
a fiscal deficit.
● A Restrictive or Contractive Fiscal Policy (G <T) occurs when the government's net
spending is reduced either through higher tax revenues or reduced government spending or
a combination of the two. This would lead to a smaller fiscal deficit or greater surplus than
the government had, or a surplus if the government had a balanced budget
EXPANSIVE
RESTRICTIVE
Avalaible income Consumption/Investment Added Demand
Production/,Employment/Prices

28. MAIN SOURCES OF PUBLIC
REVENUE IN SPAIN
Maru Liberal
Zoe Moreno

29. Public revenues are the resources that the
public sector obtains to carry out its activities
Types of public revenue
Voluntary income.
Types Coactive income.
Contractual revenue.

30. Voluntary income.
The public sector also has voluntary income such as
donations from individuals to the public sector and
also income derived from:
● The sale of goods and services
● Revenue from public assets (rental of public buildings)
● Asset sales (sales of public buildings)
● Derivatives of the performance of credit operations.

31. Coactive income.
They are the revenues denominated derived from the
power of coercion that the State has on the individuals,
according to Adam Smith.
● They are obtained from
criminal power and
fiscal power.
● They are taxes, fees and
special contributions.

32. Coactive income.
●
Rates.
The fees are the taxes that the
state charges for the
performance of a particular
service or activities under public
law.
●
Special contributions.
Special contributions are
occasional improvement
contributions for the performance
of a public work or public service
performed in the public interest.
●
Taxes.
Taxes are generally
pecuniary obligations in
favor of the State, with the
principal purpose of
financing their expenditures.
Taxes are currently the main
means of public revenue
and represent at least
eighty-five to ninety percent
of total income.

34. Contractual revenue.
They are called as originating revenues.
The State can obtain them just as a particular
individual would do it.

35. DISTRIBUTION OF MONEY OBTAINED BY
THE STATE THROUGH TAXES, IN SPAIN

36. Distribution of money obtained by the State
through taxes, in Spain
Income tax: 40%
VAT: 22%
Corporate Income Tax: 13%
Excises: 12%
Other kind of taxes: 13%

37. Amount of money obtained by the State through
taxes, in Spain, from the beginning of the crisis
until 2014. (IN MILLIONS OF EUROS)
Kind of tax 2007 2008 2009 2010 2011 2012 2013 2014
Income
Tax
72.829 71.835 64.235 66.977 69.803 70.619 69,951 72.662
V.A.T. 57.432 48.042 33.219 49.086 49.302 50.464 51.931 56.174
Corporate
Inc. Tax
44.712 27.323 20.096 16.198 16.611 21.435 19.945 18.713
Excises 20.256 20.060 19.841 19.806 18.983 18.209 19.073 19.104
Others 6.898 2.898 6.747 7.469 7.061 7.840 7.947 8.334
TOTAL 202.127 174.158 144.138 159.536 161.760 168.567 168.847 174.987

38. You can see that evolution here, from 2000 to 2014.
INCOME TAX
VAT
EXCISES
CORPORATE TAX

39. CHANGES IN THE SPANISH
INCOME TAX
Sergio Márquez
Carlos Manzano

40. ● It increased 27% for the last ten years in Spain
● It's planned that tax will be reduce in a few years.

41. The taxation of a single and with no children taxpayer

42. CHANGES IN THE SPANISH
VALUE ADDED TAX (VAT)
Carlos Blanco
Juan Carlos Fernández

43. What is the VAT?
VAT means Value Added Tax. It is an indirect tax
that is paid when a person makes use of a service
or purchase a good.
Currently, VAT is 21% in Spain.

44. VAT rates in Spain
-VAT super-reduced (4%): applied to staple
products such as bread, milk, fruits and cereals.
Other products with this rate of IVA are
medicines.
-VAT reduced (10%): this rate charges many
products, like food or transport.
-General VAT(21%): this is the percentage
applied to almost all products except the above.

45. GENERAL RATE
21%
REDUCED RATE
10%
MOST REDUCED RATE
4%
All kind of goods and
services, if they are not
levied by the reduced rates.
Some examples are:
clothes and shoes, gas,
phone, electricity, fuel,
tobacco, alcoholic
bevarages...
Fish, meat, water.
Bars and restaurants
services.
Hotel services
Passanger transport
Eyeglasses and contact
lenses
Bread, milk (animal), eggs,
cheese, fruits, vegetables,
legumes.
Books, newspapers, and
magazines.
Medicine for human beings.
Prosthesis and implants for
disabled people.
Specially protected housing
(subsidized housing)
There's been much controversy about several goods that used to have the
reduced rate and now have the 21%. These are:
Tickets for cinemas, theatres and shows.
Purchase of CDs and DVDs
Purchase of artworks
School supplies
It's been called THE CULTURAL VAT.

47. Changes on the VAT rates.

48. ● It was at the beginning of 1995 when all
increased slightly. Thus, on 1 January 1995
rates were 16%, 7% and 4%.
● The greater rise of the history took place the 1st
of September of 2012, announced with less
than two months of advance, and it was an
increase of 3 points in general VAT and of 2
points in reduced VAT.

49. PUBLIC SPENDING IN SPAIN
Diego Durán
Noelia Fernández

50. What is public spending? It's the sum of costs
incurred by public institutions or organizations. It
includes the State spending and also the
“Comunidades Autónomas”, local governments,
public enterprises and Social Security expenses.
Public spending is supported by taxation.

51. Public spending in education
Public expenditure on education in Spain decreased
4.039,0 billion in 2012, i.e. a 15.73%, to 46.606 million
euros, which represented the 9.52% of total public
spending.

52. Public spending in health
Evolution of the expenditure health public in
percentage of the GDP.
Source: Ministry of finance and Ministry of health.

53. And here you've got the public spending evolution, in
percentage of GDP (Gross Domestic Product)

54. Distribution of Spanish Public Spending
RED: Social expenses (Retirement
pensions, unemployment benefits)
BLUE: Transfers to other administrations
GREEN: Reserach and Developement,
infraestructures.
PURPLE: Public debt.
YELLOW: Basic public services (Justice,
Defense, Security...)
BROWN: Agriculture, Industry, Trade...
PINK: General services, Financial and
tax administration.

55. THE CUTBACKS DURING THE
YEARS OF THE CRISIS
Clara María Marcos
María Isabel Leo
Daniel Torres
David Franco

56. 2008-16 Spanish financial crisis
● The 2008–present Spanish
financial crisis, also known as the
Great Recession in Spain or the
Great Spanish Depression began
in 2008 during the world financial
crisis of 2007–08. In 2012 it
made Spain a late participant in
the European sovereign debt
crisis when the country was
unable to bailout its financial
sector and had to apply for a
€100 billion rescue package
provided by the European
Stability Mechanism (ESM).

57. The main cause of Spain's crisis
was the housing bubble and the
accompanying unsustainably high
GDP growth rate.
The results of the crisis were
devastating for Spain, including a
strong economic downturn, a severe
increase in unemployment, and
bankruptcies of major companies.

58. Even though some fundamental
problems in the Spanish economy were
already evident far ahead of the crisis,
Spain continued the path of
unsustainable property led growth
when the ruling party changed in 2004.
In these early times Spain had already
a huge trade deficit, a loss of
competitiveness against its main
trading partners, an above-average
inflation rate, house price increases,
and a growing family indebtedness.
During the third quarter of 2008 the
national GDP contracted for the first
time in 15 years, and, in February
2009, Spain (and other European
economies) officially entered recession.

59. SCRAPS IN SPAIN
The cutbacks suffered by Spanish society in the
wake of the financial crisis are caused by the poor
management of politicians and bankers.

60. CUTS IN EDUCATION
The cuts in education approved by the government
since 2012 were socially answered through the so-
called "Green Tides": groups of teachers who
demanded more public expenditure in state education.

61. CUTS IN HEALTH
In 2004, in the middle of the housing bubble, 4.8% of Spaniards
who needed to go to the doctor could not do so because of their
high cost, the lack of availability of nearby health infrastructure,
lack of time or long lists of wait; In 2009, before the cuts, it was
2.7%; In 2014, 2%
The cutbacks in health approved by the government since 2012
were socially answered through the so-called "White Tides":
groups of doctors who demanded more public expenditure in public
health.

62. ECONOMIC AUSTERITY
An austerity policy is an economic policy that defends the rise
of taxes and reduction of public expenditure. Spain has a list of
different cuts in economy. The main ones are in social aid, in
culture, in education, in health, in research and development,
and in public officials and employees.