Spain’s deepest budget cuts in 30 years may be just the start of a U-turn by Prime Minister Jose Luis Rodriguez Zapatero that’s already sent his popularity plunging and prompted calls for a general strike.
After losing 8,000 euros ($11,500) on an interest-rate swap sold with her mortgage, Maria Jesus del Rio joined demonstrators in her home town of Soria as protests against politicians and bankers spilled onto Spanish streets.
Half an hour before a bond auction last month, Spanish Budget Minister Cristobal Montoro told lawmakers that the country was running out of cash. Now he’s blowing open divisions within Prime Minister Mariano Rajoy’s administration.
Spain’s request for as much as 100 billion euros ($125 billion) of European bailout funds may provide the country with enough money to shore up its banking system after three failed attempts in as many years.
Spain’s banks have a capital deficit of 59.3 billion euros ($76.3 billion), less than previously estimated, according to a test designed to lift doubts about the financial industry’s ability to absorb losses.
The Spanish government won’t accept a labor-law overhaul reducing workers’ rights, said Labor Minister Valeriano Gomez as he defended measures that the country’s business lobby says won’t slash Europe’s highest jobless rate.