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Spanish PM announces budget cuts amid protests

  • Spain's government has announced new austerity measures resulting in clashes between protesters and police.

    Prime Minister Mariano Rajoy said sales tax would rise from 18 percent to 21 percent while local authorities would have their budgets slashed.

    He is aiming to save $80 billion as part of a deal with eurozone leaders to help rescue Spain's banks.

    The announcement coincided with a miners' rally in Madrid, where police fired rubber bullets at crowds of protesters.

    Eurozone finance ministers have agreed to provide $37 billion for Spain's troubled banks by the end of the month.