The Spanish Government will cut an additional €19 billion from the Autonomies’ budget within the next two years

Barcelona (ACN).- The Spanish Government will oblige the Autonomous Communities to implement further budget cuts in 2013 and 2014. Altogether they will have to cut an additional €19 billion to be added to the €15 billion budget cuts already announced for the next two years. While the previous amount of €15 billion would affect the education and healthcare service provided by the Communities, no details were provided on the €19 billion plan. This additional adjustment is part of a new €89.1 billion cut for the next two years announced this Friday by the Spanish Prime Minister Mariano Rajoy. Rajoy announced further budget cuts in order to meet the deficit targets for 2013 and 2014, set at 4.5% and 2.8% respectively. To reach them, Spain will in also cut €39 billion in 2013 and €50 billion in 2014. These amounts are to be added to the Autonomies’ €15 billion for the next two years, and therefore the total adjustment reaches €104.1 billion, which represents 10% of Spain’s GDP. Furthermore, these future budget cuts are to be added to the adjustments already made between 2010 and 2012. The only good news: Rajoy stated Spain’s GDP will be growing by 1.2% in 2014, leaving the recession behind.

The Spanish Prime Minister, Mariano Rajoy, made this announcement this Friday, after the weekly Cabinet Meeting. Rajoy’s press conference was highly anticipated after Thursday’s announcement by the President of the European Central Bank, Mario Draghi. Draghi stated that the euro was “irreversible” and that the ECB will do whatever is needed to save the euro, although firstly Governments need to put the financial mechanisms in place and request an intervention.