There are tough times ahead for Spain as the government announced €27bn of spending cuts in one of the most stringent austerity plans in the country’s history. Among other measures, civil sector wages and unemployment benefits will be frozen, and electricity and gas bills will rise. Spain is in dire straits financially, with a huge deficit, an economy that returned to recession this year, and an unemployment rate of almost 23% - the highest in the European Union. It is fervently hoped that this plan will pull Spain out of this financial mire and prevent it from requiring a bailout, as this could be utterly catastrophic for the Eurozone. Spain’s economy is the fifth biggest in Europe, twice the size of that of Portugal, Greece and Ireland put together, and many fear that if it goes into meltdown, it will take the Eurozone down with it.
The cuts sparked protests across the country, with demonstrations turning violent in some cities, and a general strike was held on 29th March. Yet some fear that these cuts, extreme as they are, will not be enough, and that the Spanish government will be forced to implement further austerity measures later in the year.