Recently, it has been reported that Spain has imposed cuts over taxes on new home sales. It is believed that the step was taken by the authorities so that they could encourage investors that the country is capable of reducing its budget deficits.

Development Minister Jose Blanco informed that the value-added tax on purchases of new homes will be cut to 4% from 8% until the end of the year. It has come to light that about 700,000 homes were left behind from the housing boom. By reducing the tax, the authorities are hopeful that the remaining houses will be sold.

Besides, it has come to light that the authorities will also be limiting doctors from prescribing branded drugs. It is believed that by limiting the prescription of brand drugs about 2.5 billion, Euros would be saved annually.

It seems like the Socialist Government is introducing too much cuts, which could have a dire impact on its reputation. The government will be facing elections on 20th of November, in order to make their impression upon the public that it needs to bring significant changes. While explaining public’s opinion, Jan Randolph, Head of Sovereign Risk at IHS Global Insight in London said, “They don't want to engineer another recession through the fiscal adjustment. It is an extremely difficult balancing act”.