Spain’s €27bn budget cut aims to reassure

Spain announced deep cuts to its central government budget yesterday as it battles to convince European partners and debt markets it can rein in its budget deficit in the face of growing complaints from the public.

The government said it would make savings of €27bn for the rest of 2012 from the central government budget, equivalent to around 2.5% of GDP. The figure includes tax rises and spending cuts of around €15bn announced in December.

The cuts come despite popular resistance — a general strike on Thursday disrupted transport, halted industry and saw some minor violence — and against a grim economic backdrop; Spain is thought to have fallen back into recession in the first quarter and has the highest unemployment rate in the EU.