Government unveils more austerity measures
Deputy Prime Minister Soraya Saenz de Santamaria and Finance Minister Luis de Guindos presented the Spanish government’s plans for further austerity measures for next year. The Deputy PM has called this “a crisis budget designed to exit the crisis”.
The Spanish government is seeking cuts of around €40 billion (£32bn; $52bn) for next year. The full details of the government’s plans are expected on Saturday but they did announce that they expected unemployment to remain at around 24.3% for next year whilst central government spending will be cut by 7.3% and tax revenues will rise by 3.8% partly through VAT increases.
The government announced that Ministry budgets will be cut by 8.9% and public sector wages will be frozen for a third year whilst an announcement on pension reform restricting early retirement is expected soon.
Budgets for the regions will be dealt with independently and 43 new laws to reform the economy including reforms to the labour market, public administration, energy services and telecommunications can be expected.
The markets appeared to respond positively if cautiously to the news with the yield on ten year bonds dropping and a slight recovery in stock markets.