Spain is currently living hard times. The country enjoyed a long boom after joining the euro zone, as low interest rates fueled a surge in construction but the European situation, that previously affected mainly countries like Ireland, Greece or Portugal, has finnally reached a new victim: Spain.
Since the beginning of the year, Spanish prime minister Mariano Rajoy and his government have adopted hard measures for braking the fateful trend that has addressed the country to a very difficult situation with over 5.5 million unemployed people (24,6% when the rate in Europe is around 11%) and alarming economic figures in order to fulfill the European Union requirements.
New measures approved will imply social and public adjustments highlighting the following VAT increases:
General type from 18% to 21% for those products not affected in the other 2 rates.
Reduced type from 8% to 10%: basically applied to food products and medical devices, passenger transport, most hotel services and housing starts.
Super reduced type 4% (not affected): applies to basic necessities such as vegetables, milk, bread, fruit, books, newspapers (and similar) and pharmaceutical.
VAT taxes were already increased in July 2010 with 2% in general type and 1% for reduced type.
These measures are applicable from the 1st of September although government says that they will be reversed as soon as the circumstances allow it.
