Spain says new austerity measures to save 8.9 bn euros
Spain's new conservative government expects the package of austerity measures it approved Friday will save 8.9 billion euros ($11.5 billion), Deputy Prime Minister Soraya Saenz de Santamaria said.
The deep spending cuts, which include the extension of a public sector salary freeze, are needed because the 2011 deficit is expected to be equal to about 8.0 percent of gross domestic product, well above target of 6.0 percent.
"We are faced with a public deficit figure estimated for the end of the year that is a much higher figure than had been communicated and promised by the previous government," she said following a cabinet meeting which approved the austerity measures.
"This high deviation requires the adoption of extraordinary measures. The government will not have the slightest hesitation in decisively confronting a situation if we want to regain credibility and lift our country from crisis."
Prime Minister Mariano Rajoy's Popular Party won a general election on November 20 in a landslide, putting an end to nearly eight years of Socialist rule.
Rajoy has vowed to revive Spain's economy and meet Madrid's commitment to the European Union to bring the public deficit down to to 4.4 percent of gross domestic product in 2012.
© 2011 AFP