Mariano Rajoy’s conservative government will be meeting today to discuss, and approve, an extra 10 billion euros of spending cuts and increased charges in health and education as part of his austerity drive and an attempt to convince investors that Spain does not need a Greek style bailout.
“The fundamental objective at the moment is to reduce the deficit,” Rajoy said in Madrid this week.
“If we don’t achieve this, the rest won’t matter: we won’t be able to fund our debt, we won’t be able to meet our commitments.”
Rajoy said his government is committed to making cuts and reforms to ensure the Spanish economy becomes stable and productive. “We need this process of adjustments in order to grow and create jobs,” he said.
Despite a high demand for long-term bonds at auction earlier this week, the country’s economy is still struggling to get moving following the crash of 2007.
With the highest public debt Spain has ever seen and the highest unemployment in Europe, Rajoy’s government have already introduced 50 billion euros of austerity cuts across the country which has resulted in protests from unions and the public.
With many Spaniards already doubting that the country can bounce back Rajoy’s announcement may be seen as a threat to encourage the people of Spain to accept the new cuts as a necessary evil that may be the only choice Spain has left.
“No one can expect such deeply rooted issues to be resolved in a few weeks,” Rajoy said.