Spaniards have reacted with shock at the government’s additional austerity measures which will see taxes go up and wages frozen.
The new centre-right government announced that Spain’s budget deficit for 2011 would be much larger than expected at eight rather than six percent of GDP.
Officials announced nearly nine billion euros worth of spending cuts.
“These measures are the beginning of a package of structural reforms that have the intention of correcting the public deficit and restarting our economy,” said Spain’s Deputy Prime Minister Soraya Saenz De Santamaria.
But many people had mixed feelings about making further spending cuts when unemployment stands at already more than 21 percent.
One Madrid resident said: “I totally disagree because they always reduce help to those most in need. They’ll remove rental assistance, they’ll freeze the minimum wage.” She added: “I think they should freeze middle and upper incomes too.”
But others were more resigned: “If you take all the money from your piggybank and there’s none left, then you have no choice but to cut. Of course I would prefer no cuts were made but if that’s what we need, then we should cut,” said one man in the capital.
But as recession looms once again across the eurozone, Spain’s new government faces a rocky time with some analysts saying even further cuts will be necessary.