Spain unveils ‘austere’ 2011 budget

Discussion in 'Economics' started by ASusilovic, Sep 24, 2010.

  1. Elena Salgado, Spanish finance minister, unveiled what she called an austere 2011 budget that will increase income tax for the rich and cut ministerial expenditure by an “extraordinarily large” 16 per cent.

    Spain’s Socialist government says it is determined to stick to its deficit reduction plans in the aftermath of the global economic crisis, and ministers are eager to distinguish their country from more vulnerable nations such as Ireland and Portugal on the periphery of the eurozone.

    “This is an austere budget, a socially responsible budget and it’s a budget that focuses on growth and on the change of economic model that we are trying to introduce,” Ms Salgado said on Friday, referring to official attempts to promote innovation and high technology industries and reduce the share of construction in gross domestic product.

    She was speaking shortly after the cabinet approved the budget, which will be presented to parliament in further detail next week.

    Ms Salgado announced an increase in the top marginal rate of personal income tax, currently 43 per cent. That will increase by 1 percentage point for annual incomes over €120,000 and by two points for those above €175,000.