• 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
Video
Watch: This rare seahorse has just been discovered in Spain
Screenshot from video of seahorse.

Watch: This rare seahorse has just been discovered in Spain
26 minutes ago

Do you have a good name for this little sea monster?

Spain reigns as sunseekers shun terrorism-hit Med resorts
Photo: AFP

Spain reigns as sunseekers shun terrorism-hit Med resorts
1 hour ago

Sunseekers are opting for “safer” destinations in Spain after recent terror attacks in other Mediterranean resorts.

Bid launched to rename towns honouring Francoist heroes
The town Águeda del Caudillo in Salamanca uses the term 'caudillo' - a title used for Franco. Photo: El Ayudante/Wikimedia Commons.

Bid launched to rename towns honouring Francoist heroes
3 hours ago

Who would want to live in a town named after a dictator?

Opinion
Six things the USA could learn from Spain
Photo: Patrick McDonald/Flickr

Six things the USA could learn from Spain
4 hours ago

US native, Layla A. Reaves, tells The Local what she thinks her homeland could learn from her adopted country.

Now migrant hides inside car bumper to cross into Spain
Screen shot: Las noticias de actualidad/YouTube

Now migrant hides inside car bumper to cross into Spain
5 hours ago

The desperate man, from Guinea, was discovered tied up inside the bumper in a car crossing from Morocco into Spain.

Puppeteers held for 'glorifying terrorism' freed after outcry
A file photo of puppets. Photo: Leon Neal/AFP

Puppeteers held for 'glorifying terrorism' freed after outcry
6 hours ago

The two puppeteers spent five days in jail in what many see as a blow against freedom of expression.

Victim of mistaken identity walks free after decade in jail
Romano Van der Dussen (L) and Mark Dixie

Victim of mistaken identity walks free after decade in jail
6 hours ago

A Dutchman in jail since 2003 for sexual assualt will walk free after new DNA evidence implicates a notorious British criminal.

US military wife in naked rage after stabbing baby in Spain
Stock photo of baby feet. Photo: Amy the nurse / Flickr

US military wife in naked rage after stabbing baby in Spain
23 hours ago

The wife of a US military man was discovered walking naked around the southern town of Utrera shouting "kill, kill, kill" in English.

Globe-trotting gender gap: Spain drops female diplomats
Concepción Figuerola Santos​, Spain's ambassador to Windhoek, Namibia (left) with Namibia's Vice Minister of International Relations. Photo: Spanish Embassy to Namibia.

Globe-trotting gender gap: Spain drops female diplomats
23 hours ago

Two-thirds of Spain's women ambassadors were removed from office under the last conservative government.

Seven of the best cheesy chat up lines in Spanish
Photo: J. Sibiga photography/Flickr

Seven of the best cheesy chat up lines in Spanish
1 day ago

In the run up to Valentine's Day, why not try out some chat up lines in Spanish?

Sponsored Article
US taxes and FATCA: 'The time for hiding is over'
National
Ten of Spain's most romantic getaways for Valentine's Day
Sponsored Article
Back to Boho chic: Win your new season wardrobe
Culture
Wacky and whimsical: Spain goes carnival crazy
National
Danger: Early toxic caterpillar plague sweeps across Spain
National
Like father like son: Napkin proves matador paternity suit
National
UK rallies expats in Spain ahead of referendum on Brexit
National
Secret to long life? Spaniard lived to 107 on 'red wine diet'
National
Ten Spanish corruption scandals that will take your breath away
National
Watch: Gravity-defying stunts at Spain's Wind Tunnel Games
National
10 English words you'd never guess were really Spanish
National
Madrid to rename Francoist streets after terrorism victims
National
Olé? Bullfighter takes five-month-old baby into the ring
National
Watch: Moment south Spain struck by 6.3 magnitude quake
Travel
9 charming Spanish towns to visit before the tourists come
National
Heartbroken parents publish suicide note from bullied son
National
Spain launches new reality TV show: 'I want to be a nun'
National
Eleven very good reasons to be happy you live in Spain
National
Loyal dog waits two months at hospital door for dead owner
Younger, scruffier, and with a babe in arms: This is Spain's new elite
National
Ten adrenaline-fuelled adventures for thrill-seekers in Spain
National
Ten things you need to know about the new president of Catalonia
National
Spain's Princess Cristina: From fairy tale life to national 'baddie'
Politics
Seven reasons why forming a new government is mission impossible
2,922
jobs available