Debt Crisis: Spain’s budget deficit higher as country introduces raft of spending cuts
THE NEW Spanish Government has revised up its budget deficit figure as it outlined a new raft of cuts.
It has raised its forecast for the country’s 2011 to 8pc of gross domestic product (GDP), or output, from an earlier figure of 6pc by the last Government.
The new administration also approved €8.9bn in spending cuts as well as maintaining a freeze on civil servants’ salaries and a freeze on nearly all hiring in the public sector.
Income tax for the richest Spaniards will be raised for two years.
Like Ireland, Spain is saddled with a big unemployment problem and is trying to convince markets it can get to grips with its economic difficulties.
Headed up by Prime Minister Mariano Rajoy of the Popular Party, the Government announced the measures after a cabinet meeting today.
His party won a sweeping victory in late November of the socialists and took power last week.