Plan for €7 billion from Spain with an additional €5 billion from VAT and OECD

The Organization for Economic Cooperation and Development (OECD) deems it "essential" for Spain to accelerate the pace of fiscal consolidation, for which it proposes a series of measures including the removal of the 'anti-inflationary shield' when recovery is "firmly on track", as well as tax increases and pension adjustments, the net fiscal impact of which is estimated at around €6.8 billion.

"Accelerating the pace of fiscal consolidation is a necessity in light of the demographic outlook and high public debt," reads the 'economic survey of Spain' by the world's foremost economic 'tank' presented Wednesday in Madrid.

OECD, which expects the public deficit to be 3.8% of GDP this year and fall to 3.5% next year, while debt will exceed 109% in 2023 and reach 110% in 2024, believes that sustainable fiscal consolidation must be implemented to reduce the public debt-to-GDP ratio and create space for necessary spending and respond to future shocks.

"In light of the unfavorable demographic outlook and related spending pressures associated with an aging population, as well as the need to increase spending on green transformation, it seems prudent to accelerate the pace of fiscal consolidation to restore pre-COVID pandemic debt levels within a few years," the OECD warns.