Budget cuts all over Europe amidst debt crisis by Zuzana Zelenakova

Tough times are ahead of European countries that are struggling with the debt and deficit crisis. Members states of the European Union are trying to balance their spending in the face of the crisis and they hope to achieve that through severe budget cuts. As a result, the EU´s budget for 2011 will be cut too most likely. Spanish Prime Minister Jose Luis Rodriguez Zapatero has already announced austerity measures. The cuts will total about 15 billion euros and will affect mostly wages of state employees and public investment. “We need to make a singular, exceptional and extraordinary effort to cut our public deficit and we must do so now that the economy is begin! ning to recover,” said Zapatero. Civil service salaries are supposed to be cut by 5 percent in 2010, which of course did not please unions. So far, the relationship between the government and the unions has been good, although the unions prevented the raise of the retirement age from 65 to 67. “These measures reinforce all (those) ... taken over the weekend in Brussels and are what the market was waiting for, although not many people thought the prime minister would dare to take them,” said Nicolas Lopez, of Madrid brokerage M&G Valores. Currently, one of the strongest players on the European field is Germany. The country led by Chancellor Angela Merkel will deliver the biggest part of the 750 billion euros Greek bailout from the EU member states. Germany was most reluctant to approve the bailout plan and the atmosphere in the country is still very tense when it comes to this issue. German citizens are already punishing Angela Merkel for her approach towar! ds the Greek crisis, she lost the majority in the upper house ! of parli ament, which will make it almost impossible for her to deliver any reforming legislation.

related story (sgx17299): http://www.france24.com/en/20100514-german-austerity-everyon...

by Zuzana Zelenakova for Cantell TV (http://cantell.tv)

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