31 Mar 2012

Spain plans massive spending cuts to tackle debt

10:22 am on 31 March 2012

The Spanish government has announced spending cuts of €27 billion to try to reduce its deficit and strengthen the economy.

Changes will include freezing public sector workers' salaries and reducing departmental budgets by 16.9%.

Large businesses will pay more tax and charges for electricity and gas will go up.

The government says the changes will add €12.3 billion to its tax revenue this year, the BBC reports.

Deputy Prime Minister Soraya Saenz de Santamaria says the budget proposal is severely austere, but essential.

He says the nation is in an extreme situation.

The announcement came a day after nationwide strikes were held in protest at the austerity measures.

At least nine people were arrested and about 50 injured in the demonstrations, in which some protesters hurled rocks and police fired tear gas.