Spain Prepares New Austerity Measures

Posted September 27th, 2012 at 5:10 am (UTC-5)
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Spain is set to unveil a new series of austerity measures aimed at making it easier for the government to request help with its budget crisis, while protesters continue to voice their opposition to the cuts.

The government will detail the measures Thursday along with its proposed budget for 2013. The reforms are expected to include higher taxes, changes to the retirement system and wage freezes for public employees.

Anti-austerity protesters gathered near the parliament building in Madrid Wednesday night calling for Prime Minister Mariano Rajoy to resign. Demonstrations there Tuesday ended in clashes with police.

Nearly a quarter of Spaniards are unemployed and uncertainty about the country's economy has sent the government's borrowing costs soaring this week. Spain's finance ministry also reported Wednesday that the country is sinking deeper into recession.

Mr. Rajoy says the majority of people in Spain are not in the streets protesting against the cuts. He is also facing pressure from other countries in the euro zone to seek help from the region's bailout fund.

Budget crises have already forced Greece, Ireland and Portugal to secure international bailouts.

Leaders in Greece are meeting Thursday to try to agree on a new round of austerity measures needed to receive the next round of bailout funds.

Prime Minister Antonis Samaras was holding talks with coalition leaders to decide how to cut another $15 billion from the budget.

The meeting comes a week before a deadline set by Greece's international creditors — the European Union, the International Monetary Fund and the European Central Bank.

Multiple rounds of budget cuts have been unpopular in Greece. Protests Wednesday in Athens drew 50,000 people.