Following the tumultuous EU bailout of Greece and the mass outrage and protests over subsequent austerity measures, finance ministers have turned their gaze towards Spain. Spain, with the highest unemployment in Europe, is expected to miss its budget deficit for the year, peaking attention from the Eurozone.
European leaders are suggesting "tougher cutbacks than prime minister Mariano Rajoy recently announced, but also abandoned their old deficit targets," the Guardian reports.
"French minister François Baroin said there was no alternative to the austerity course," Irish Times reports. "There is no other path. Any other line doesn’t take into account the reality of the world economy today," Baroin stated.
The Guardian reports:
Eurozone finance ministers have signed off on a second Greek bailout package, worth €130bn (£109bn), and turned their attention to Spain.
Greece slashed its debts by more than €100bn in the last few days by swapping its privately held bonds for new, longer maturity paper with less than half the nominal value. The debt exchange paved the way for eurozone ministers to give the final nod to the latest rescue package for Athens, pending discussions about the International Monetary Fund's €28bn contribution on Thursday, as well as national votes. [...]
As the ministers gathered in Brussels they swiftly turned their attention to Spain, which admitted that it would miss its budget deficit target for this year. As the country heads back into recession, Spain – Europe's fourth-largest economy – will only cut its deficit to 5.8% of GDP, rather than the 4.4% goal imposed by Brussels. In 2011, the shortfall came in at 8.5%, far above the 6% target.
The eurogroup asked Spain to aim for a 5.3% deficit target this year. "The Spanish government expressed its readiness to consider this in the further budgetary process," it said.
Juncker added: "It will be the responsibility of the Spanish authorities to choose the initiatives that will have to be taken in order to bring down the budgetary deficit in 2012, what is most important is what is the target for 2013. What is less important, but nevertheless important, are the avenues chosen in 2012."
Record unemployment among youth and increasing tensions over harsh labor reforms have lead to mass protests and demonstrations there -- including more than a hundred thousand demonstrators across Spain on Sunday.
Spain's two main unions, the General Workers Union and the Workers Commissions, have called for a general strike on March 29 to protest the government's austerity push.
Agence France-Presse reports:
Unions said rallies took place in 60 cities and towns across Spain, including Madrid, Barcelona, Valencia and Seville. [...]
"I came because I'm convinced neo-liberalism is driving us to disaster," said Madrid protester Antonio Martinez, a retired professor. He carried a placard reading: "Don't let our grand-children be slaves."
The government hopes the reforms will boost job creation and revive the economy. Spain's unemployment rate is the highest in the developed world at nearly 23 percent, with the rate at almost 49 percent for people aged under 25.
Under reforms approved by Prime Minister Mariano Rajoy's government on February 11, maximum severance pay is slashed from 45 days to 33 days salary for each year worked, for a maximum worktime of 24 years.
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