New "crisis budget" in Spain includes massive cuts

(Vatican Radio) The Spanish government on Thursday announced a new budget for 2013 which plans to cut €40 billion Euros in spending. Ministry budgets were slashed by nearly 9 percent for next year and public sector wages have been frozen for the third year in a row. The austerity budget is part of the country’s efforts to avoid an international bail-out, and officials say they hope it will pull the nation out of its economic crisis. The new budget, called by officials a crisis budget, was hammered out in a 6-hour cabinet meeting. It will be presented to the parliament on Saturday, but a vote is not expected until after weeks of debate. Spain is struggling with a recession, and its unemployment rate is at 25%, which is much higher among young people. Besides the most severe budget cuts in Spain’s modern history, the budget increases the value-added tax, and makes structural reforms. The big question remaining is whether Spain’s 17 autonomous regions will do their part. They have not yet presented their own budgets, and must find €5 billion in savings to meet budget targets. The regions account for half of total government spending, and regional authorities have resisted the austerity measures backed by the central government.
Listen: