Spain OKs austerity plan; investors unimpressed
HAROLD HECKLE AND JORGE SAINZ
MADRID — Concerns over Spain’s attempts to restore market confidence in its economy resurfaced Thursday after a bond auction went poorly and its borrowing costs rose — even as the country’s parliament passed the latest round of harsh austerity measures designed to cut its bloated deficit.
The ruling conservative Popular Party used its majority in Parliament to push through the measures, which include a rise in sales taxes and a wage cut for civil servants.
As dusk fell, tens of thousands of government workers, trade union members and disgruntled Spaniards began marches and rallies in 80 cities throughout Spain. Large crowds gathered in Barcelona and Bilbao, while leading Spanish newspaper El Pais estimated on its website that more than 100,000 had attended the rally in Madrid.
The government also published details of the $122.9 billion financial assistance agreement between Spain and the Eurogroup aimed at shoring up the country’s struggling banks.
The Economy Ministry statement said the precise bailout amount “will be known once a bank to bank scan is complete,” and that the loan mechanism will be available until Dec. 31, 2013. It also said the interest rate will be variable.
Marchers in Madrid carried Spanish flags bearing black bows for mourning and banners saying, “No to the cuts” and “You have ruined us.”