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07/02/2012

The business community calls for a strong Basque government and supports early elections

The Basque business community is clearly in favour of bringing forward the regional elections, initially due to be held in March next year, given the weakness of the current executive headed by the first minister, lehendakari Patxi López, who is in a minority, and to the difficult economic situation. According to the leading figures in the Basque business association Confebask, speaking from a strictly economic perspective, as stressed by its chairman, Miguel Angel Lujua, "it is important to have a strong Basque government to help the country overcome its present difficulties as soon as possible".

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Although they did not specifically call for early elections, the leaders of Confebask were clear about the need to form the strongest government possible, and they based their opinion on the fact that in view of the adverse economic scenario, the Basque Autonomous Community (CAV) will need to have the right budget in 2013.

According to Miguel Angel Lujua, and regardless of who forms the next government, the next budget will be "technically difficult to draw up" in view of the need to prepare "austere" accounts for current expenditure, as otherwise, "we will not be able to tackle this crisis ". Accordingly, the chairman of Confebask called uponPatxiLópez"to act boldly and think more in the medium and long terms".

Basque business circles were not at all happy with the Basque government’s management of public spending, as under the governing regional socialist party (PSE) spending has soared to fund current expenditure, which would be unimaginable in a household economy, criticised Lujua, instead of undertaking major investment projects to drive the Basque economy.

Confebask has also presented a fiscal approach that differs from the one presented by the PSE, through the Basque government, or by the left-wing nationalists party Bildu, through the provincial council of Gipuzkoa. According to Confebask, Basque fiscal pressure, as the sum of Corporate Income tax and employer contributions to the Social Security, is higher than the European average and, in terms of the largest economies, only lower thanFrance. Therefore, in addition to calling for the adoption of extraordinary tax measures for reactivating investment and business capitalisation, they lobbied for a reform of Corporate Income tax to reduce its general rate to 24% and introduce a lower rate for SMEs.

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