Spain's debt interest: 100 million a day from your taxes
Spain faces 36.5 billion euros a year in debt interest: 100 million a day funded by taxpayers. The Treasury has raised state debt to 1.54 trillion euros.
English · Original discussion in Spanish · Published
The public debt bill: 100 million a day in interest
One hundred million euros a day. That is what it costs to keep Spain's state debt alive, according to the latest figures from the Treasury. It is no exaggeration: interest alone swallowed 36.5 billion euros last year. The bill is paid out of the budget and, therefore, out of every taxpayer's taxes.
State debt tops one and a half trillion
The Directorate General of the Treasury put state debt at 1,541,840 million euros in February, an increase of 75,931 million in absolute terms and 5.17% in relative terms. The pace of growth is hard to sustain, even though there is always an emergency or a disaster to justify it.
Default, the ever-present temptation
Faced with those numbers, some propose a radical solution: not paying. Leave the euro, bring back the peseta and cover the hole with national currency. The idea has undeniable charm, but it collides with the reality of the markets: a default would make financing more expensive and leave Spain sidelined in international trade. Others respond with the opposite argument: the debt was borrowed and must be repaid. If you don't want to pay, don't borrow.
The underlying discussion, however, is who pays the bill and where it ranks in the list of priorities. Interest competes directly with healthcare, education and pensions. Every rate rise automatically becomes a cut to another budget line or a tax increase, and the debate always ends in the same dead end: there is no such thing as free money.
With the debt ball growing at 5% a year, the uncomfortable question is a different one: how much can the budget take before interest devours everything else? The next Treasury figure will offer some clue, but it does not look like it will bring good news.
One hundred million euros a day. That is what it costs to keep Spain's state debt alive, according to the latest figures from the Treasury. It is no exaggeration: interest alone swallowed 36.5 billion euros last year. The bill is paid out of the budget and, therefore, out of every taxpayer's taxes.
State debt tops one and a half trillion
The Directorate General of the Treasury put state debt at 1,541,840 million euros in February, an increase of 75,931 million in absolute terms and 5.17% in relative terms. The pace of growth is hard to sustain, even though there is always an emergency or a disaster to justify it.
- 1.54 trillion euros of state debt.
- 75,931 million more than twelve months earlier.
- 36.5 billion in annual interest alone.
Default, the ever-present temptation
Faced with those numbers, some propose a radical solution: not paying. Leave the euro, bring back the peseta and cover the hole with national currency. The idea has undeniable charm, but it collides with the reality of the markets: a default would make financing more expensive and leave Spain sidelined in international trade. Others respond with the opposite argument: the debt was borrowed and must be repaid. If you don't want to pay, don't borrow.
The underlying discussion, however, is who pays the bill and where it ranks in the list of priorities. Interest competes directly with healthcare, education and pensions. Every rate rise automatically becomes a cut to another budget line or a tax increase, and the debate always ends in the same dead end: there is no such thing as free money.
With the debt ball growing at 5% a year, the uncomfortable question is a different one: how much can the budget take before interest devours everything else? The next Treasury figure will offer some clue, but it does not look like it will bring good news.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (11 replies).
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