Spain’s newest austerity measures will slash Euro 65 billion from the public deficit by 2014, reveals Prime Minister Mariano Rajoy, who gave in to pressure from the European Union to avoid a full state bailout.
Rajoy has introduced a 3-point hike in the main rate of Value Added Tax on goods and services raising it to 21 percent and placed cuts on unemployment benefits plus civil service pay and perks. Further, he has declared new indirect taxes on energy, plans to privatize ports, airports and rail assets in addition to the reversal of property tax breaks to lower the public deficit to 3 percent of gross domestic product by 2014 and relax this year's goal to 6.3 percent.