In 2012, after Spain's government had run up an extraordinary budget deficit in the previous year, the newly elected government of Spain's new prime minister, Mariano Rajoy, committed to both increase the government's revenue and to decrease its spending to put the Spain on a more sound financial footing. Those changes had been demanded by the European Central Bank as a requirement for its continuing to lend money to bail out Spain's fiscally distressed government, which had been put at risk by its bailout of that nation's banks following the collapse of the Spanish housing bubble.
To help put Spain's fiscal situation going into 2012 into context, we're presenting an updated version of the chart we first featured nearly a year ago when we first examined how Spain arrived at that state. The chart shows the relationship between Spain's GDP per capita and its annual government tax collections and expenditures per capita for each year from 2000 through 2011:
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