Spain Flags Steeper Deficit Cuts
By JONATHAN HOUSE
MADRID—Under pressure for more drastic measures to cut a towering budget deficit and avoid a Greek-style financial crisis for Spain, Prime Minister José Luis Rodríguez Zapatero announced cuts in public-sector wages, social-welfare spending and investment.
Speaking in Parliament, Mr. Zapatero appealed to Spanish society to make an additional belttightening effort. "We need it to fulfill our European commitments, we need it to attract investors and, of course, we need it to transmit an image of stability," Mr. Zapatero said.
Mr. Zapatero announced plans to cut public-sector wages by 5% this year and freeze them next year.
Also next year, he said pensions will be frozen and that the so-called "baby check," a €2,500 ($3,171) payment to families for every newborn child, will be eliminated. He said public investment will be cut by €6 billion between this year and next.
The announcements helped buoy Spanish stocks, with the index trading up 1.3% at 10,134.8. "Expectations were a pay freeze for public sector workers, so the 5% cut is a big deal and shows political will," CM Capital Markets trader Dirk Schnitker says.
Mr. Zapatero said the new measures will allow Spain to cut its budget deficit to 9.3% of gross domestic product this year and to 6.5% in 2011 from 11.2% in 2009. The government had previously pledged to lower the budget deficit to 9.8% of GDP this year and to 7.5% of GDP next year.
Budgetary problems in countries such as Spain and Portugal helped to deepen a financial crisis that started in Greece, leading the European Union, the European Central Bank and the International Monetary Fund to coordinate unprecedented measures to stabilize euro-zone financial markets. The EU agreed to create a €500 billion fund to support euro-zone countries in difficulties. In return, it asked these countries—including Spain—to accelerate deficit-cutting efforts.
Comento: Nada como o tempo para forçar um encontro entre um governante socialista e a relidade da economia. Eis que Zapatero agora fala em cortes mais drásticos dos gastos públicos pois precisa atrair investidores! Ainda assim, parece ser muito pouco, muito tarde. O sistema de welfare state está em xeque. O gato subiu no telhado. A distribuição de privilégios pelo governo encontrou seu limite. A farra das cigarras esgotou a capacidade de sustento das formigas. Parasitas demais para hospedeiros de menos, eis o efeito de anos de welfare state na Europa. Pode preparar a tesoura, Zapatero! Esses cortes são muito tímidos. Pode no máximo ganhar algum tempo. Mas a ilusão acabou. Os parasitas terão que voltar ao trabalho, poupar mais, consumir menos, enfim, compreender que 2 + 2 = 4 novamente!