Spain to face tough budget cuts

Spain’s newly elected Prime Minister Mariano Rayoy on Friday is expected to push ahead with one of the nation’s most hard-hitting budgets in recent times.

The news comes as almost a million protestors took to the streets late on Thursday after a general strike paralysed heavy industry and disrupted transport in Madrid and Barcelona.
But Rayoy said he is adamant and will stand by his promise to the other eurozone members to decrease the deficit in spite of the country’s soaring unemployment and current recession.

Rayoy’s Popular party will attempt to bring down the public deficit from last year’s 8.51 percent to 5.3 percent of GDP. This would mean an estimated €20bn to €30bn in austerity measures in addition to the already announced €8.9bn spending cuts and tax increases of €6.3bn.

Those in opposition believe Spain will struggle to deal with such austere budget cuts. The action is likely to lead to a rigid recession, which would make the adjustment even harder to meet.