Spain unveils £22bn austerity cuts
Spain’s government has unveiled a E27bn (£22.5bn) deficit-reduction package including spending cuts and tax increases on large companies, as it scrambles to convince the EU and investors that it will not need a bailout.
Deputy Prime Minister Soraya Saenz de Santamaria said the 2012 draft budget calls for cutting central government ministry spending by an average of nearly 17 per cent and freezing civil servant wages. Overall government spending will be cut by E17bn (£14bn) .
Finance Minister Cristobal Montoro said it was the most austere budget proposal since Spain regained democracy in 1977 after the death of General Francisco Franco. “We are taking extraordinary measures because the situation is extraordinary,” Montoro told a news conference after a Cabinet meeting at which the budget plan was passed.
The blueprint will go to Parliament on Tuesday and is expected to be formally passed in June.