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Jaume Llopis, Professor, IESE University of Navarra

No more cuts

Tue, 13 Aug 2013 08:45:00 +0000 Published in La Vanguardia

Every day we witness discussions on whether the welfare state is in danger as the current social model in Spain faces the most severe crisis of democracy. In Spain, the welfare state was created very late, in the 1980s, and considerable progress was made in the following decades. In the face of unrenounceable social achievements, reducing it further through cuts is an alternative that we cannot afford, since we are still at the bottom of Europe in terms of public expense in social protection, equivalent to 20% of GDP, far from the European Union's average with 27%.

The welfare state is one of the great assets of European civilization and one of Europe's greatest contributions to the world. Governments and institutions as well as individuals have to do their utmost to ensure benefits to combat poverty, unemployment, illness and Education . It is a priority goal to maintain the achievements as a moral foundation of social cohesion. Welfare" expenditure should be seen as an investment, which not only increases cohesion but also common productivity.

And how can this be done in the face of the current scarcity of economic resources? Everyone, especially governments, must optimize income and expenditure. Unfortunately, it has already been demonstrated that more cuts do not generate growth, but rather more unemployment and less welfare. There are more things to cut, no doubt, but not necessarily in the social aspects. An expert at management would be able to reduce government and autonomous community spending by approximately 10% without cutting social spending at all. As soon as we analyze the budgets we will see a large number of items that could be substantially reduced without representing a reduction in basic benefits. In addition, we have more than 4,000 public companies and even if we could not obtain anything from some of them, others could be sold with sufficient revenue to avoid cuts in untouchable areas.

In final, there is a welfare state achieved with great effort of all and that we should not dismantle more. Without further cuts, managing the public and private sectors with good business practices.