Chemistry Board

Spain has set out its austerity budget for 2013, with new spending cuts but protection for pensions, amid a shrinking economy and 25% unemployment.

Deputy Prime Minister Soraya Saenz de Santamaria called it "a crisis budget designed to exit the crisis".

The new programme of savings, tax rises and structural reforms will be overseen by an new budget authority.

Expectations are growing that Spain will seek a financial bailout from its eurozone partners.

Among the key points presented were:

  • a 12% average cut in ministerial spending
  • a freeze in public sector pay for the third consecutive year
  • a new independent authority to monitor government finances
  • an increase in pensions funded by drawing on 3bn euros of reserves
  • a new 20% tax on lottery wins above 2,500 euros (£2,000; $3,200)
  • a new car scrappage scheme

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