Spain’s government has unveiled a tougher than expected budget for next year.
Trying to restore confidence in the fragile economy Madrid is further slashing spending and will tax the rich more heavily.
Finance Minister Elena Salgado said central government spending will be cut by around 10 billion euros in total down nearly eight percent on 2010.
She said: “This is our austerity budget, our social budget, and a budget that generates economic growth and encourages our vision of society.”
Salgado’s forecast is for Spain’s economy to grow by 1.3 percent next year, that is much more optimistic that the International Monetary Fund’s projections.
The Spanish Parliament will vote on the budget next Thursday.
The minority socialist government is negotiating with other parties to try to ensure that it is approved.
If not new elections would have to be called.