The general elections being round the corner in Spain, the ruling Socialist party and opposition popular party are offering big tax cuts to win the hearts of the electorate. In 2007 the GDP growth of the country stood at 3.75% and it immensely helped the infrastructural growth. In last few years the property prices in Spain envisaged an unprecedented upward movement followed by infrastructural development. This has attracted thousands of legal and illegal immigrants from neighboring nations, in search of jobs and quality of life.
The socialists are planning to hand out “baby cheques” of $3,717 for every newborn in Spain and rents will be subsidized for the youth. The government has allocated this amount from the fiscal surplus they have garnered through better economic performance of the nation in current financial year. Many families are expected to gain from the changes made by the government’s childcare and other benefits scheme. Families with child care costs in both 2005-06 and 2006-07 will receive two rebates in 2007-08, which may go up to even $8,000 in some cases.
Businesses may also benefit from the pre-election spending by the parties in fray. Both parties boast they would provide a platform to boost links with the global market and improve productivity through innovation and better business practices. In a booming economy illegal immigrants are important tools of progress but when there is a slow down, pushing them out of the country takes the pole position in the public opinion. If growth falls below 3 per cent, experts say unemployment will rise among unskilled immigrants who have got piled up in recent years to take up jobs in construction, agriculture and as domestic help.
Other economists, however, forecast a sharper fall in construction would be due to credit squeeze. The elections which will be held in March 2008 is heading for a photo finish because neither of the leading parties have a clear cut formula to sustain the economic growth.