News Summary 2: Rajoy announces less harsh cuts in 2012 and expects to not raise VAT and Income Tax

http://www.larazon.es/detalle_normal/noticias/1995533/economia/rajoy-anuncia-recortes-menos-duros-que-en-2012#.UXcpASvwJRE

1. The Spanish government has recently been in the process of approving and carrying out many reforms. The most recent batch of reforms, approved on Friday by the Council of Ministers, does not include changes in the pension system or introduce new tax increases, which will unfortunately cause further cuts in public spending. At this point in the economic crisis occurring in Spain, the chief executive of the Council of Ministers, Mariano Rajoy, believes that these reforms "are not an option but an obligation".

2. With further public spending cuts, GDP will continue to fall. When government spending decreases, it negatively impacts national GDP. If the GDP goes down, then consumers are less likely to spend or invest and it all continues in a downward spiral.

3. The economic crisis in Spain has led to this issue. However, the Spanish government is putting together these reform packages to improve the economy in the future by creating jobs and support small entrepreneurs. The government predicts that the economy will continue to grow in 2013 but very slowly. The best thing they could do would be to invest and try to not cut government spending too much.