Spanish budget imposes further austerity measures

  • Spain announced its budget for 2013 on Thursday with new spending cuts but protection for pensions.

    Deputy Prime Minister Soraya Saenz de Santamaria described it as "a crisis budget designed to exit the crisis".

    The savings, tax rises and structural reforms are to be overseen by a new budget authority.

    Among the key points presented were: a 12 percent average cut in ministerial spending, a freeze in public sector pay for the third year in a row, an increase in pensions and a new 20 percent tax on lottery winnings of above $3,200.

    The budget was announced amidst increasing expectations that Spain will seek a financial bailout from its euro zone partners.

    On Friday, the results of a stress test on Spain's banks are due to be released.