Blood, debt and fears: crowds rise up as Spain agrees new €65bn cuts
Gijon
Thursday 12 July 2012
Related articles
The Spanish Prime Minister, Mariano Rajoy, unveiled a fresh round of spending cuts totalling €65bn over two years at a noisy session of parliament yesterday. The measures represent the country's latest bid to convince financial markets that its public finances are in order and prevent a debt crisis spreading to the rest of the eurozone.
At the same time, hundreds of striking miners led a rally which stretched for miles along Madrid's main road in protest over cuts in subsidies they say will destroy Spain's coal industry.
The protesters tossed fireworks and clashed with riot police, who fired rubber bullets, as the unions vowed widespread action for the week beginning on 21 July. The demonstrations spread to the capital's parliamentary building and the headquarters of the governing conservative People's Party (PP).
At least one volley of rubber bullets was fired directly at miners, relatives and sympathisers as they gathered outside the Industry Ministry after marching up Madrid's main north-to-south street, the Castellana. The clashes with police and the rubber bullets sent people scurrying for safety.
"Today [Rajoy] has announced a new attack on the unemployed and public employees. They raise VAT, but not a single measure to make the rich pay, who caused this crisis," the leader of the Comisiones Obreras union, Ignacio Fernández Toxo, told the protesters.
The latest cuts are designed to get Spain's budget gap back to within a eurozone limit of 3 per cent of GDP by 2014, down from 8.9 per cent in 2011, and came a day after European Union ministers agreed to pump €30bn into the country's ailing banks – with more to come – and give the government another year to meet its deficit target.
Mr Rajoy did not immediately make clear how much of the cuts – equivalent to about 6.5 per cent of Spain's annual economic output – were in addition to €45bn of savings the government has announced since it took office in December.
Spain's income tax take has tumbled because one in four workers is on the dole and the economy is now in its fifth year of sluggish growth or recession, so the government now hopes to raise revenue by increasing the standard rate of value added tax to 21 per cent from 18 per cent, as expected, as well as introducing a new "green tax" on fuel.
To cut outgoings, the government will slash unemployment benefits, scrap a Christmas bonus for civil servants and axe 30 per cent of local councillors, as well as speed up plans to raise the retirement age to 67 from 65, amongst other measures.
Mr Rajoy has gone back on the PP's election campaign pledges by raising VAT and ditching tax breaks for new home buyers, just months after restoring them when it took power, but the premier said he had little choice if Spain were to balance its books.
"They are not pleasant measures but they are indispensable. We need to borrow money. We are locked in a circle and need to get out. We are at a crucial time that will determine our future," he told MPs.
The Socialist opposition leader, Alfredo Pérez Rubalcaba, said the measures were "unfair and ineffective" and Spain had surrendered control of its economic policy, but he offered to join forces with the government to draw up "a fair austerity plan to promote growth and generate confidence". Spain's benchmark borrowing cost, the rate it pays on its 10-year bonds, eased to about 6.6 per cent after Mr Rajoy's speech, from 6.8 per cent on Tuesday, but was still close to the 7 per cent mark at which Portugal gave up trying to sell bonds last year and asked for a bailout.
The miners rallied in Madrid on Tuesday after marching hundreds of miles from pits in the north of the country, where for weeks they have been engaged in underground sit-ins and blocking roads and railway lines.
-
Have shock jocks gone too far after Rush Limbaugh called Sandra Fluke a slut?
-
Former Google exec says he has 100,000 emails showing how 'immoral' company avoids paying UK tax
-
British business: We need to stay in the European Union - or risk losing up to £92bn a year
-
World news in pictures
-
British father faces charges after confessing to slitting his two children's throats in Lyon flat
- 1 Notes from a small island: Is Sealand an independent 'micronation' or an illegal fortress?
- 2 British business: We need to stay in the European Union - or risk losing up to £92bn a year
- 3 The moral case on tax avoidance is overwhelming - and we all know Google wants to do the right thing
- 4 Sam Wallace: The second coming of Jose Mourinho at Chelsea will be a reunion that can only end in tears
- 5 It’s official: thanks to Stephen Hawking's Israel boycott, anti-Semitism is no more
Get your summer started with British Military Fitness
BMF is the UK’s biggest and best loved outdoor fitness classes
Visit York
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Enter the latest Independent competitions
Win anything from gadgets to five-star holidays on our competitions and offers page.
Business videos from commercial thought leaders
Watch the best in the business world give their insights into the world of business.
Independent Dating
iJobs General
KS1 Jobs in Chester
£85 - £140 per day: Randstad Education Chester: Day to Day job opportunities f...
Supply teaching roles in Peterborough
£15500 - £25500 per annum: Randstad Education Cambridge: Qualified primary sch...
Primary Teaching Jobs in Chester
£85 - £140 per day: Randstad Education Chester: Day to Day job opportunities f...
Teaching Tutorin in Prisons
Negotiable: Randstad Education Cambridge: Teaching & Tutoring withing Prisons....
Day In a Page
The price of pacifism
Jason Isaacs: Groupies, theatre bores and James Bond
Sealand: 'Micronation' or illegal fortress?
Legend of James Hunt has set Hollywood hearts racing
Macklemore: 'I don't have moderation'


"
width="140"
height="90"
onclick="location.href='http://www.independent.co.uk/arts-entertainment/music/news/germans-blame-angela-merkel-for-poor-eurovision-song-contest-performance-8623289.html';" />





Comments