onstructed in the beginning of 1992. In an attempt to solve the problem of excess demand, a monetary policy, which raised interest rates, was produced to hinder investment demand in order to slow down the progress of Spain before it went deeper into economic recession. However, a new policy is being created that will force fiscal policy to play a more central role in the containment of demand, therefore leading to lower interest rates. The present structure of debt in Spain is quite biased towards the short term, which poses future difficulties for the Treasury financing in the long run. In modern market economies, progressive taxation and distribution of income in the form of services and benefits through welfare institutions are the two tools which are utilized to correct social inequalities. Spain was an exception to this rule up until the eighties and made serious economic adjustments. In comparison to the European Community, the tax burden is below average as it has increased from 28.1% to 36.4% since 1986. The current tax system consists of true taxes, dues and fees, and special levies. These serve to pay back any benefit as a result of public works or services. Government is involved in crediting and stocking markets: administrative participation is confined to regulating the conditions for access by and permanence of regular operators and to monitoring the operations of financial enterprises, in accordance with the standard practice in economically developed nations. Despite its rocky past Spain has made leaps and bounds toward an economy that is competitive with the rest of the European world. With a strong new government and more macroeconomic reforms to keep inflation and unemployment down while manipulating the interest rate, Spain could be an important player in the European as well as the worlds economy....
