Spanish civil servants took to the streets in angry protest as the government approved new sweeping austerity measures that include further wage cuts and tax increases for a country reeling under the weight of a near 25 percent unemployment rate, the Associated Press reports.
Spain is under pressure to get its public finances on track amid concerns in the markets over the state of the country’s banks and the wider economy, which is back in recession.
“Spain is going through one of its most dramatic moments,” Deputy Prime Minister Saenz de Santamaria said after a Cabinet meeting at which sales tax hikes and spending cuts were approved. Admitting that the austerity measures were “neither simple, nor easy, nor popular,” she said the government would try to enact the measures “with the maximum justice and equity.”
The aim of the latest package of measures is to chop €65 billion ($79 billion) off the budget deficit through 2015, the biggest deficit-reduction plan in recent Spanish history.
Though the increase in sales taxes, which risk slowing consumption and worsening Spain’s recession, will take effect Sept. 1, other reforms will be left for later in the year, including a plan to speed up the gradual raising of the retirement age from to 65 to 67.
The civil servants – who saw their wages cut 5 percent on average in 2010 in the first round of austerity cuts – are usually paid 14 times a year. The government is now axing an extra payment made just before Christmas.
The prime minister, his cabinet and lawmakers will also suffer the cut. At the local, regional and central level, there are around 3 million public servants in Spain.