Spanish Economy Minister announces austere budget and spending cuts for 2009

Pedro Solbes has said spending will increase by just 3.3 percent next year and many departments will see cut-backs.

The financial crisis has obliged the Spanish Minister for Tax and the Economy, Pedro Solbes, to present the most austere budget for next year seen in a decade.

Spending will increase by only 3.3%, in fact only 2% when provisions for increased unemployment benefit payouts are removed, and only the areas of infrastructure, research, housing and the new dependency law will be left untouched by the cut backs.

All ministries will see their spending reduced, and despite the austerity the prevision is for the year to still end with a deficit of 1.5%. In fact the final balance could be even worse, given that there are the signs that income is set to fall even further.

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