Little to divide main parties on economy

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Rivals make similar tax promises as financial uncertainty looms.

28 January 2008

MADRID - As the general elections approach on 9 March, the governing Socialists and the opposition Popular Party (PP) have started to make strikingly similar campaign pledges, at least when it comes to economic issues. With Spain the first European country to hold general elections this year, and with international economic uncertainty in the air, there is little to distinguish the main threads of the two parties' tax and employment proposals.

Prime Minister José Luis Rodríguez Zapatero on Saturday announced that if he is re-elected, every taxpayer will receive a EUR 400 rebate next year through personal income tax (IRPF) deductions, while workers with the lowest salaries will not pay IRPF at all.

"This is the first time that a democratic government in Spain has returned income to all of its citizens," Zapatero said Sunday at a party meeting to approve the campaign program.

The announcement mirrored one made less than two months ago by opposition leader Mariano Rajoy, who promised that if he becomes prime minister, people who earn less than EUR 16,000 a year will not pay IRPF. The cost for state coffers would be EUR 5 billion in each case.

In the area of employment, the Socialists got a head start by promising two million new jobs. Although the PP at the time criticised this pledge, arguing it is society and not the government who creates jobs, on Sunday Rajoy said that his government would create the conditions for 2.2 million new jobs.

The fact that economic issues are taking centre stage in the campaign, leaving aside earlier controversies such as antiterrorist policy and territorial debates, is the result of polls indicating that voters are concerned about an impending economic crisis, even though the gloomiest forecasts for 2008 point to GDP growth of above 2.5 percent in Spain.

[Copyright EL PAÍS / C. E. CUÉ 2008]

Subject: Spanish news

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