Spain: Austerity pain but no gain?

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Spain: Austerity pain but no gain?

Spain: Austerity pain but no gain?
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Will it work?

That is the question Spanish newspapers are asking about the prime minister’s tough new austerity plan, imposed under EU pressure.

Many agree that Mariano Rajoy had little room for manoeuvre in trying to reduce the deficit and avoid a full state bailout. But analysts also fear his shock treatment could exacerbate the recession.

Cutbacks are nothing new in Spain.

A civil servant in Madrid who gave her name as Nuria said: “Public sector workers have suffered twice but others have also been affected with lower pensions, reduced unemployment benefits, more taxes. All of society is paying the consequences.”

Madrid’s borrowing costs have soared as investors fret that Spain could join the likes of Greece and Portugal in needing a sovereign bailout.

Against such a backdrop, Jesus Ronda, a financial worker in the capital, believes the government’s measures are necessary.

“Europe has demanded them and Spain needs strong financial restructuring as well as in other economic areas,” he said.

However the impact of austerity continues to stir strong feelings. After Wednesday’s miners’ rally in Madrid, medical workers have protested with a lock-in at their hospital in the city to denounce budget cuts as a danger to public health.