Spain's Economics has entered the New Year with the old and familiar problems, which are getting worse by the minute. Despite official optimism, we are still sliding dangerously towards very delicate situations that entail evident risks of a prolonged phase of recession or very weak growth, which would mean putting an end to the process of Spanish convergence with the main economies of our environment initiated in 1985 and consolidated between 2002 and 2007.

The year 2009 closed with a budget deficit that increased fivefold, from 13.9 million to 71.5 million euros up to November, equivalent to 6.8% of GDP. To this imbalance must be added that of the autonomous regions and local councils, resulting in a total deficit that now exceeds 11% of GDP. Public finances are moving towards an unsustainable status , revenues are falling and expenses are rising, while public debt has risen from 36% of GDP in 2007 to 60% today.

The announced tax increases - capital income and VAT - will have a reduced impact and are not recommended by international organizations. They have been taken despite the OECD's recommendations, which point to the advisability of waiting until 2011 or even 2012.

The government is trying to present a four-year fiscal consolidation program to reduce the deficit of all public administrations to 3% by 2013, as required by the European Commission, but is unable to specify the path to achieve this difficult goal.

Drawing a parallel between a national Economics and a family Economics , common sense would demand that the head of the household start by recognizing the seriousness of the status -a true state of emergency-, amend the incorrect measures taken previously and adopt, on the one hand, drastic measures to contain the expense and, on the other hand, encourage income growth by facilitating the activities of family members.

The fiscal contraction of 2010 is very similar to the one adopted in Japan in 1997, which led the country into the deepest recession since the end of World War II. In that country, a prodigious decade was followed by a lost decade. If we don't do our homework, the long Spanish boom years prior to 2007 could be followed by our own lost decade.