Spain announces 27 billion euros in budget cuts

MADRID. March 31. KAZINFORM Spain's new conservative government announced 27 billion euros ($35 billion) in cuts from the budget this year to reduce the deficit in the midst of the nation's prolonged economic crisis, Kazinform has learned from CNN.

"We are in a critical situation. This is the most austere budget in our democracy, and with tax measures to bring in new income to guarantee public services," Treasury Minister Cristobal Montoro said after the weekly Cabinet meeting.

There will be an average spending reduction of 16.9% at government ministries. Salaries will be frozen for civil servants, who will be required to work an additional 10 hours per month. Business taxes will increase, but sales tax will not, to avoid further dampening consumption, Deputy Prime Minister Soraya Saenz de Santamaria said.