Economy,  UK Politics


This is what happens when you deny there’s a problem, and then later wake up:

In May, Spanish Prime Minister Jose Luis Rodriguez Zapatero announced a 5% cut in public sector pay, starting this month. Salaries will be frozen in 2011.

There were also big cuts in public investment and development aid. Some pensions were frozen.

The cuts are part of a 15bn euro (£12bn, $18bn) package of austerity measures also meant to reassure the financial markets that Spain will meet its debts.

But the trade unions are angry that public sector workers are being penalised.

They accuse the Socialist party of reneging on previous promises, and taking desperate measures now – after insisting for months that Spain would be relatively unaffected by the economic crisis.

And in The New York Times.

On Friday, Spain suffered another downgrade of its debt even as calls were increasing for early elections after the close budget vote. Together, the two events suggest to political leaders throughout Europe that voters and investors are fed up with the lack of resolve and leadership in dealing with the economic situation.

“The government made a real mistake in being late in recognizing this crisis and continues to make a mistake in the ‘drip by drip’ measures to solve it,” said Jordi Sevilla, one of Mr. Zapatero’s former ministers. “You can only get credibility by presenting one strong and coherent package.”