Spain faces another austerity budget in 2011: PM
Spain faces another austerity budget in 2011 as it seeks to reduce its public deficit, Prime Minister Jose Luis Rodriguez Zapatero said on Friday.
Zapatero reaffirmed the government's commitment to cutting the public deficit from 11.2 percent of gross domestic product in 2009 to six percent in 2011 and three percent -- the EU limit -- by 2013.
"Our commitment to reduce the deficit to six percent in 2011 and three percent by 2013 is being respected," the prime minister told a press conference on the first half of a year which had been "difficult."
"To achieve that, the 2011 budget which we will present in September will of necessity be restrictive and austere," he said, with ministries likely to face spending cuts of 15 percent.
In May, the government pushed through a 15-billion-euros austerity package which included a five-percent pay cut for civil servants and a freeze on pensions.
Those cuts came on top of a 50-billion-euro austerity package announced in January.
The Spanish economy, Europe's fifth largest, slumped into recession in 2008 due to the collapse of a property boom which had long fuelled growth.
Growth is expected to remain sluggish for several years and the country's unemployment rate has soared to nearly 20 percent, putting huge strains on the state's finances which pushed the deficit way above the eurozone three percent limit.
© 2010 AFP