Bloomberg reports that Spain will increase its fight against tax fraud as it desperately tries to prove to global capital markets investors who have abandoned its bonds. This abandonment has cause sharply higher and unsustainable borrowing costs. Bloomberg writes “Limits on using cash and rules to make taxpayers declare foreign bank accounts will be approved in today’s Cabinet meeting”
Althought tax collection has been a problem in most financially troubled southern European nations, the use of “get tough” plans as a way to sell deficit reduction is agressive. Prime Minister Mariano Rajoy must see that his programs for austerity measures have not convinced investors who believe that his nation’s GDP will continue to fall. So, he has combined that austerity with a tax crack down. At least he has something new to peddle to financiers.