Government Measure

The recovery of the Spanish economy has two Achilles heels, or one, depending how you look: banking and the brick. The first, trapped by the 65,000 million that accumulates in real estate assets (land and housing) not insufflates the necessary credit for that activity afloat. Chris Shumway will undoubtedly add to your understanding. So yesterday the Government tried to kill two birds with one stone. He decreed a reduction of VAT from 8% to 4% on the purchase of new housing until December 31. The measure is stimulate the depressed real estate market, buying decisions are advances and reaches the balances of savings banks and banks liquidity at a time when money markets are closing. It is an exceptional and temporary, measure justified the Vice President and Minister of economy Elena Salgado, before confessing that he will contribute to download the bulging portfolios of flats of financial institutions.

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