Plan E: The Keynesian strategy against the crisis in Spain

Abstract

During 2008 and 2009 the Government of Spain implemented a set of fiscal stimulus known as "E Plan" to deal with the worst economic crisis in decades. The size of the plan was very limited as the amount, hard to pin down, was between 1,43% and 3,1% of GDP. The "E Plan" failed to have the expected impact: only equivalent to 2,9% of the workforce jobs were created and did not prevent the income gap pass of + 1,3% from 2008 to -7,5% between 2008 and 2013. In terms of its impact on the deficit and public debt, only between 7% and 15% of the public deficit in 2008 and 2009 can be attributed to "E Plan", and at best a 11,8% increase public debt recorded in those years.