Social spending is the biggest casualty of Spain’s latest raft of austerity measures, announced in the budget.
As many as 43 new laws to reform the economy will be pushed through in the next six months in an effort to find €20 billion of savings, including measures to limit early retirement.
Spain’s finance minister Luis de Guindos confirmed the gap between legal and actual retirement ages will be reduced as the pension system adapts to longer life-spans.
The government will also take €3 billion from the pension reserve, with 60% of the savings expected to come from spending cuts.
Spending at government ministries is to be slashed by 12.2% in order to save €4.3 billion, while public sector wages will be frozen for a third year.
Debt servicing costs will be €38.6 billion in 2013, while tax increases will include a 20% gambling tariff.
De Guindos insists the budget measures exceed EU expectations, and added that Spain will continue to analyse the conditions of the ECB bond buying programme before making a decision on a bailout request.
Article source: The Olive Press