Spain’s Debts Continue to Mount Next Year
According to the Spain government, the country’s debt crisis is not easing as expected which puts more strain on Madrid to cut back on the expenses.
Finance minster Cristobal Montoro predicted that Spain debt will grow to 85,3 gross domestic product this year followed by 90,5% next year, BBC reported.
Today Spain is facing the largest unemployment rate and low tax income, which means government needs to cut back on the expenses. Analysts say it’s only a matter of time when Spain will need more financial help. Despite all, government is raising pensions, one of the budget’s biggest expenditure.
Spain government fell into a financial hardship after the real estate crisis in 2008 which caused Spain’s overheated real estate market to crumble down completely.
Madrid was forced to inject large amounts of money national banking sector, which found itself under large amount of bad loans.
The latest rescue package was introduced last Thursday which was set to cut 13 milliard Euros from public sector expenses next year.
Government needs another 59 milliard Euros
According to audit by Consultation company Oliver Wyman, Spain needs another 59,3 milliard Euros. Audit was concluded in 14 largest banks in Spain of which 7 failed their “stress test.”
Spain released its new plan of economic reforms under which the budgets of ministries will be cut tenth, government is expecting tax profits to increase 3,8 percent.
Red Cross to help out over 300000 people in need
Before the crisis Red Cross provided food supplies mostly to immigrants, but now when every fourth of country’s adults is unemployed, families depend more and more on the free food, according to BBC.
For the first time Red Cross has to rely on the Spanish people to donate money for the less fortunate.