Today Spain will reveal its cards on the 2012 budget. The government of Mariano Rajoy will present to parliament in the morning the numbers on the availability of state coffers, in the light of the cuts foreseen for the current year: 27 billion euros to bring the country back into line. It is the fruit of the Spanish-saving recipe approved on 30 March by the Council of Ministers, and analysts wonder if these measures can really bring the country into line, under pressure from the European Union which aims to bring the deficit/GDP ratio back within 5,3%.
Tense markets therefore. Even in light of rumors that related to a possible request for aid from the Troika, rumors that have inflamed the yields of the Bonos and raised the spread to alarming levels. For weeks, the Spanish newspapers have been talking about the maneuver as "the most massive since the establishment of democracy". And according to the text it doesn't seem like an exaggeration.
Among the highlights is expected the cut to the expenses of the Ministries, which will decrease by 17% (much more than the 15% announced by Prime Minister Rajoy), while the salaries of civil servants will be frozeni, while at first there was talk of wage cuts. On the other hand, the situation of those who struggle to enter the world of work is more difficult. The unemployed will also pay the price of the maneuver, since they have been 500 million euros removed from the budget for access to the world of work. VAT, on the other hand, will not be affected, but electricity and gas bills will increase by 7% and 5% respectively. Hello also pensions and social shock absorbers, while a particular type of judicial appeal will be taxed, i.e. the one in second instance.
