Ciudadanos Targets Easing of Spain's Deficit Goals From 2017

  • Cutting public sector to save $11 billion a year, Rivera says
  • Rivera to reduce income and corporate tax, reduce writeoffs

The pro-market party Ciudadanos will seek to ease restrictions on Spain’s budget deficit from 2017 if it wins power in December’s election, leader Albert Rivera said.

Rivera plans to win over Europe’s budget police with a wide-ranging program of economic reforms that include cutting 10 billion euros ($11 billion) of annual spending by eliminating provincial governments and merging some town halls. He also wants to lower income tax rates by three percentage points and cut the main corporate tax rate to 20 percent from 28 percent while reducing the number of writeoffs. The tax cuts will cost 7.8 billion euros, he said.

“I can generate the trust we need with our European partners so we can sit down with them and negotiate a deficit that lets us reactivate the Spanish economy,” Rivera said in an interview at his party’s headquarters in Barcelona. “We will generate more trust than the current government because we will implement real reforms instead of just raising taxes or cutting the welfare state.”

Rivera, who turns 36 this week, argued that the economic recovery that Prime Minister Mariano Rajoy hopes will help secure his People’s Party a second term in December’s general election is leaving behind many Spaniards. He said Rajoy has no real enthusiasm to change the way Spain works and risks repeating the errors that caused a six-year slump after the property market collapsed in 2008.

“We can’t just aspire to a new real estate bubble every 10 years,” Rivera said. “We’re more ambitious than the PP.”

The European Commission sees Spain’s budget shortfall coming in at 3.6 percent of gross domestic product in 2016 -- missing the 2.8 percent target set by the European Union and leaving the fourth-largest euro-area economy in breach of the bloc’s 3 percent deficit ceiling for a ninth straight year. Spain will also miss this year’s target of 4.2 percent by 0.5 percentage points, the commission said last week.

With six weeks until polling day, Rivera is challenging Rajoy’s traditional rivals, the Socialists, for second place less than a year after his party expanded beyond its Catalan base to become a national force. Ciudadanos was half a point ahead of the Socialists on 19.8 percent in a survey by TNS Demoscopia last week. The PP led on 26.7 percent.

Rivera cut his political teeth in Catalonia opposing the separatists who won almost half the votes and a majority of seats in September’s regional election. Ciudadanos came second, leading the parties who want to keep Spain together.

The Catalan parliament on Monday voted to begin the process of seceding from Spain and Rajoy said he’ll ask the Constitutional Court to block the move.

Deputy Prime Minister Soraya Saenz de Santamaria asked Rivera to a meeting in Madrid this week as the central government seeks allies for its response to the challenge from the separatists.

“In the parliament a very significant minority is ignoring 53 percent of Catalans and 90 percent of Spaniards,” said Rivera. “This is an abnormal situation.”

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