Spain Announces 65 Billion in Austerity measures

After the International Labour Organization published a report that austerity measures could cost the Eurozone 4.5 million jobs Spain is announcing its new round of Austerity measures.

In what is to make Prime Minister Mariano Rajoy very unpopular the austerity package includes service cuts as well as tax hikes adding up to 65 million euros. The opposition parties have protested that this will further reduce Spain’s chances of getting out of a recession and decrease unemployment, currently at 22 percent.

Even with the current ESM approved (but not yet delivered), the 30 Billion emergency rescue (still in court) and a 1 percent increase in the deficit target form 5.3% to 6.3% and an extra year to reach it… It will be hard for Spain to go from 8.9 percent to 6.3 percent in a year by decreasing civil servant’s pay and increasing the retirement age align with tax hikes.

Opposition parties in Europe are gaining the upper hand by making the promise that stimulus can reverse the current tide, although it must be said it was too much stimulus which caused the current predicament the Eurozone finds itself in.

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