Spanish
Austerity Plan Approved |
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The
Spanish parliament has backed a 15bn-euro (£13bn) Austerity
package by one vote as the country strives to cut its budget deficit,
which saw a vote of a 169 in favour against 168. Included within
the Austerity Plan are wage cuts of 5% or more for civil servants
and slashes to public investment plans as Spain hopes to cut deficits
and ease fears of a Greek-style crisis.
A parliamentary
defeat would have been a massive blow to Spain which possible would
have resulted in a turmoil effect on the markets. Spain’s
programme is intended to reduce a deficit of 11% of GDP to 6% by
2011.
Even
though Spain has technically moved out of a recession in the first
quarter of 2010 with a growth of 0.1%, many Spaniards fear the effects
of the cut on the economy, where unemployment sits at 20% twice
that of the Euro Zone average could be far worse.
The EU themselves are adding pressure to more fragile European economies,
such as Portugal, Greece and Spain to impose these Austerity Plan
together with more tougher measures.
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