More hardship for the Spanish
Spain’s Prime Minister, Mariano Rajoy, has announced further spending cuts and tax increases designed to bring down the country’s deficit.
The spending cuts amount to €65 billion including wage cuts for public servants and parliamentarians and a 30% reduction in the number of local councillors. There will also be more closures of state owned enterprises and a gradual increase in the retirement age from 65 to 67. The prime minister also announced that VAT will rise from 18% to 21% whilst a reduced rate on some foods will go up from 8% to 10%.
The announcement came a day after the European Union Eurozone countries agreed a €30 billion bailout of Spain’s banks. The Eurozone countries also agreed to extend Spain’s deadline to cut public deficit to 3% of GDP by one year to 2014.
Meanwhile tens of thousands of protesters descended on Madrid yesterday to join 240 miners who had walked 450 kms from the north to Madrid to protest at further job cuts and mine closures in the industry. The protests resulted in violent clashes with riot police.