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Further Austerity Measures Specified in Spain's Budget

  • Caroline Arbour

Protesters shout slogans during a demonstration against cuts in public education, in central Madrid, September 27, 2012.

Protesters shout slogans during a demonstration against cuts in public education, in central Madrid, September 27, 2012.

The Spanish government presented its 2013 budget Thursday, detailing spending cuts for ministries, new taxes and reforms that total about $51 billion. The austerity measures may embolden protesters who have promised a “heated fall.”

The Spanish government of Mariano Rajoy presented a tough budget Thursday, the second since it was elected this past November.

The aim is to keep promises to the European Union to cut deficits to the equivalent of 6.3 percent of its economic production this year and 4.5 percent next year.

Vice President Soraya Sáenz de Santamaria said it is a budget drafted to pull Spain out of crisis in a time of duress. Some analysts say it is aimed at showing Spain is serious about cutting its spending. Skeptics say Spain eventually may have to seek a financial bailout from its European neighbors.

To meet its objectives, Madrid has capped spending for next year at $163 billion [127 million euros].

This budget is 9 percent larger than last year, but in reality there is less money to go around, since a larger chunk will be used to pay the country´s debt.

Only grants and pensions will increase, and the government will have to dig into its emergency fund for the first time to pay for the old-age security benefit.

Ministries’ budgets will shrink by an average of 12 percent - as much as 30 percent for Agriculture. Public employees will see their wages frozen for the third consecutive year.

Unions are not pleased.

Miguel Borra, the president of civil servant union CSI-F, said government workers have become scapegoats in this crisis.

Cristóbal Montoro Romero, Spain´s Minister for the Treasury and Public Administration Services, reiterated the government´s commitment to reforming the public sector and increasing transparency to restore confidence.

Forty-three new laws will be adopted to revive the economy and create jobs. Yet the government does not expect next year's unemployment rate to be much better than this year. It already is near 25 percent.

In Madrid this week, thousands of people demanded that the prime minister and his government resign, during two days of protests that turned violent.

Protesters are planning a new demonstration Saturday.