BERLIN — Amid a growing sense that Europe is slipping back into instability after months of relative calm, Spanish leaders unveiled sweeping spending cuts and new taxes Thursday in a last-ditch attempt to get their country’s finances on track. But they were silent about whether they would seek a formal bailout to prop up their turmoil-wracked economy.
Europe’s financial crisis appears to be going strong nearly three years after it started, with talks in Greece about its future again at an impasse, European economic indicators pointing toward recession and even relatively strong France confronting a bleak financial outlook. Violent anti-austerity protests rocked Spain and Greece this week, while a June deal to give aid to banks seemed to partially unravel after finance ministers questioned basic assumptions about it.
Although the euro crisis is in its third year, you may still be wondering how European governments got into this sticky situation in the first place. If news of bailouts leaves you confused, this primer is for you.
Yoo Woo-sung made strides in Seoul. Then his sister told interrogators he was on a mission for the North.
Many are outraged by a bill that would allow French universities to teach more courses in English.
After losing value for years, U.S. currency is thriving in the fast-wilting economy Hugo Chavez left behind.
France will see its first gay weddings within days, after president signed a law Saturday authorizing marriage.
In Spain, the attempt to close a $52 billion gap in the budget follows $84 billion in grinding cuts and taxes that were announced in July, and it underscores just how difficult the country’s road to recovery may be.
With Spain’s borrowing costs skyrocketing and its overall debt burden rapidly rising, the money raised by new taxes is funneling straight into interest payments. And its recession has been far deeper than anticipated in earlier forecasts, meaning that even these new measures may not be enough to stabilize the economy. In fact, analysts say, they may worsen unemployment, which at 25 percent is already the highest of the 17 nations that share the euro currency.
The measures came after two days of massive anti-austerity protests on the streets of Madrid and renewed separatist efforts in the restive Spanish province of Catalonia. Spanish citizens are increasingly questioning how much more budget pressure they can take.
Also Thursday, Greek leaders announced that they had reached preliminary agreement on $14.8 billion in additional cuts demanded by the international debt inspectors making a do-or-die decision about whether to give Greece a fresh installment of its bailout or leave it to go bankrupt and possibly off the euro. Negotiations have been beset by conflict amid reports that Greece has wildly missed the financial targets that were set out less than a year ago.
And a key European Commission business and consumer survey released Thursday painted a gloomy picture of September, with signs pointing toward a significant recession.
In Spain, Prime Minister Mariano Rajoy has been trying to benefit from the early September promise of aid from the deep-pocketed European Central Bank without actually resorting to that help, because it would require him to seek a bailout and accept strict oversight from European watchdogs who have pushed painful cuts in Greece and other struggling countries.
Affecting a range of citizens
The measures announced Thursday could preempt at least some of the requirements that would be imposed on Spain if it did seek a bailout, thus easing the sting to Spanish sovereignty. Officials repeatedly emphasized that they were acting within European Union recommendations, perhaps an indication that was indeed their plan.