Spain's government imposed more austerity measures on the beleaguered country on Wednesday as it unveiled sales tax hikes and spending cuts aimed at shaving $79.85 billion off the state budget over the next two and a half years.
A day after winning European Union approval for a
huge bank bailout and breathing space on its deficit program, Prime Minister Mariano Rajoy warned Parliament that Spain's future was at stake as it grapples with recession, a bloated deficit and investor wariness of its sovereign debt.
"We are living in a crucial moment which will determine our future and that of our families, that of our youths, of our welfare state," Rajoy said to catcalls from the opposition socialists and other parties as he revealed the biggest single amount of projected deficit savings in modern Spanish history.
He spoke as thousands of miners stung by a huge cut in government subsidies marched through downtown Madrid and clashed with riot police outside the Industry Ministry.
The spending cuts, designed to cut 65 billion euros off state budgets by 2015, include a wage cut for civil servants and members of the national parliament and a new wave of closures at state-owned companies. Spain will also speed up a gradual increase in the retirement age from 65 to 67. They are to be approved officially Friday at a Cabinet meeting.
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