Madrid will await the results of the Eurogroup meeting next Monday, where Spain's deficit-reduction deadline might be extended by another year, before applying the austerity measures. Spain ended the 2011 fiscal year 8.9% in the red, higher than the projected 6% figure, and is supposed to reduce its public debt to 3% by 2013. The government wants to go to Brussels with a credible austerity plan in the hopes of gaining a one-year extension for that target, to 2014.
The new measures, which might be included in the 2013 state budget, would be in addition to state spending cuts of 27.3 billion euros, and to the 16 billion euro cuts in regional spending that are already in this year's budget. They might include reducing the number of public employees by 10%, freezing pensions, cutting unemployment benefits, shutting down regional public TV stations, and hiking value added taxes.
Next year, Spain will approve a 2014 budget in line with EU and IMF targets, Finance Minister Cristobal Montoro told reporters.