(Associated Posers) – MADRID, SPAIN – The European Debt Crisis is reaching the boiling point as Spain and Portugal brace for massive “austerity” protests. The official unemployment rate in Spain is around 25% while half of those under 24 are out of work, leaving them plenty of time to protest. Meanwhile Spain is set to borrow upwards of $266 billion (in US dollars) next year in a rescue package.
The 2013 budget proposal would freeze public sector wages while trimming ministry budgets by 8.9% and the budget also assumes increased revenue from a higher VAT tax, as the country struggles to get a grip on an out of control deficit. The government claims the higher tax revenue will cut the deficit from 9% to 6.3% of the budget.
"This is a crisis budget aimed at emerging from the crisis ... In this budget there is a larger adjustment of spending than revenue," Deputy Prime Minister Soraya Saenz de Santamaria told a news conference after a marathon six-hour cabinet meeting. The government was also analyzing conditions for a bailout package of its own. Pensions will rise by only 1%, not keeping up with inflation. In a sign of how tight the budget is this year the government said it would use 3 billion euros from social security reserves to pay pensions in 2012.
Opposition member Lucia Silva spelled out their demands “We demand that the EU provide as many euro's as necessary to keep us in the lifestyle we have become accustomed to. We demand to continue living in the land of milk and honey with skittle-crapping unicorns”.
Spain protest leader Mario de Mariosa exclaimed “We demand the end of debt, period. We demand to never live in the real world again!”
In FRANCE, the Socialist government of Francois Hollande, elected earlier this year, announced a dramatic 75% tax increase on France’s super-wealthy and corporations. The tax hikes, which are temporary, will supposedly garner €30 billion, and accompany a €10 billion spending freeze. French businesses have denounced the tax hike, claiming it is “impeding investment and so will block innovation”.
Hollande spelled out his expectations “I expect that businesses and the wealthy will not change their spending and earning patterns to avoid this tax. I do not expect any CEO or business owner to intentionally earn less than a million euro's. I do not expect rationality or logic to impede our goal of recreating a socialist utopia”.
-Next door in Portugal the country last year agreed to budget cuts in return for a $100 billion (in US dollars) bailout. The main trade union confederation has called people to the streets for a massive demonstration.
-In Greece, judges and prosecutors now claim that cuts in their salaries are “unconstitutional” and will continue their work stoppages to at least October 5. Opposition leader Tsipras proposed an international meeting to forgive Greek debt, saying “the solution we propose is a European conference on debt, as happened in 1953 for the Federal Republic of Germany.”
-Meanwhile in Italy today, tens of thousands of union members marched in the capital, Rome, protesting austerity measures. Also joining them were workers at the Colloseum and Roman forum, forcing a closure of the two tourist landmarks. Prime Minister Mario Monti’s government approved healthcare and pension cuts, a continued freeze on wages of public workers, and an increase in taxes, in a bid to avoid a Greece-style debt crisis. Italian unemployment has hovered at 10%.