• Spain's news in English
 
app_header_v3

Spain's 'black' economy worth 20 percent of GDP

AFP · 15 Jul 2013, 14:22

Published: 15 Jul 2013 14:22 GMT+02:00

The value of Spain's underground economy shot up in 2008 but has stabilized at about 20 percent of GDP since 2010, the country's Foundation for Financial Studies (FEF) said on Sunday.

That figure is higher than everywhere else in the European Union except Italy, where the figure is 21 percent, the private research body said.

In Germany, the so-called 'black' economy is valued at 13 percent of GDP, while it is a far lower 10 percent in both France and the United Kingdom.

In terms of Spanish industries, the rate of under-the-table activity is below 10 percent in the financial sector but up around 35 percent for construction, FEF said.  

The FEF said Spain's tax office is missing out on somewhere in the region of €18 billion to €20 billion because of this illegal economic activity.

The foundation also argued that this black economy provides work to at least a million Spaniards.

The president of FEF Juan Carlos Ureta, said the presence of this second economy gave a false picture of Spain's economic position.

"It looks like we have more unemployment than we do, and more fiscal deficit than we do, and this lessens foreign confidence," said the Director.

FEF recommends the creation of German-style mini-jobs, or jobs where people work up to 40 hours and earn up to €400 a month.

This would help people move into legitimate jobs, the think tank argues.

FEF also believes tax brackets should be simplified and that marginal personal tax rates should be reduced.

Story continues below…

At the same time, they are calling for a cut in company taxes.

FEF analyst Ramiro Martínez also added the level of bureaucracy is a serious barrier to Spanish businesses looking to go legitimate. 

FEF promotes itself as an independent research group. Supporting institutions include clothing giant Inditex, telco Telefónica and consultants KPMG among many others.

Your comments about this article

Today's headlines
Barcelona city proposes new tourist tax on 'day trippers'
Tourists taking photos of the Sagrada Familia in Barcelona. Photo: AFP

Tourists not planning to stay overnight in Barcleona could soon have to pay a tax to visit the city...

Recipe: Pisto Manchego - a Spanish veggie delight
Pisto Manchego. Photo: thespanishcuisine.com

Vegetarians sometimes struggle in meat-loving Spain, but this Spanish ratatouille is a hit for vegetarians and meat-eaters alike.

Ibiza bans drinking in street…  and that includes water
Police will be on the look out for offending tourists. Photo: AFP

This summer tourists in Ibiza risk dehydration or a fine under new measures that will see the drinking of all liquids banned from public areas.

What's on in Spain: May 2016
The San Isidro fiestas in Madrid. Photo: Bru Garcia/AFP.

Spaniards are eager to get out and enjoy the spring weather in May, taking to the streets to throw fiesta after fiesta.

Eurovision bans Basque flag alongside that of Isis terrorists
The ikurriña - the Basque flag - has been banned. Photo: Rober/Flickr

The popular singing contest has banned the flag of the Basque Country, angering politicians who have demanded the "boycott" be lifted.

'Troll' wins payout from family of missing Spanish boy
Yéremi Vargas vanished in March 2007. Photo from Missing Person's poster

The parents of Yéremi Vargas named and shamed an internet troll after nasty comments about their missing son. And now they are being punished.

Brace yourself: Fierce storms to hit Spanish Med at weekend
A couple stand on a beach in Spain during a storm. Archive photo: Josep Lago / AFP

Spain's national weather agency is forecasting heavy rain on Friday and Saturday along the Mediterranean coast.

Spain in tug-of-war with Lorca family over poet's archive
Lorca was shot during the Spanish Civil War. Photo: AFP

The Spanish authorities have banned the export of the poet's archive.

Paternity test 'proves Spanish matadors are father and son'
Both bullfighters are known as El Cordobes. Photo: AFP

In the bullring it really is a case of like father, like son.

'Hugely important' haul of Roman coins found in Spain
Stock photo of Roman coins. Photo: Helen Hall/Flickr

Over 600kg of bronze coins were unearthed during building work in Seville.

Sponsored Article
How to launch your international career
National
Expats didn't 'abandon' UK so ALL Brits should get EU vote
Sponsored Article
What's the best way for expats to transfer money abroad?
Travel
Discover Spain's breathtaking national parks
National
Spain's stunning locations for Game of Thrones Season Six
National
Couple caught on camera having sex on metro platform
National
Ten delicious Spanish dishes you must try before you die
National
Forget tampons and use sea sponges, says Catalan town
Culture
Nine reasons why Cervantes is better than Shakespeare
International
Two thirds of Spaniards want Britain to remain in EU
National
Seven great ways to celebrate 400 years of Cervantes
National
Report raises fears of Isis terror plot on Costa del Sol
National
Five bonkers ways Spain is commemorating Cervantes
National
Bad owners to sweep streets in Madrid's war on dog poo
Culture
Ten weird things that shock Spaniards about the UK
Features
Debunking the myth: How true are Spanish stereotypes?
International
Bienvenidos a Blighty: Spanish workers flock to UK
National
Spaniards design mattress to catch out love cheats
National
Spanish town fined for staging bizarre 'slippery swine' race
National
Fat man who crushed nativity donkey to death goes free
International
Consulate reveals weirdest requests from Brits abroad
Lifestyle
Recipe: How to make Spanish albóndigas in tomato sauce
National
First journalist punished over photos under Spain’s gag law
National
'Hug a Brit to stop Brexit' Europeans urged
National
Benidorm's Sticky Vicky, 72, retires from sexy magic show
3,349
jobs available