Austerity needed to avoid fate of Greece, Ireland and Portugal, says PM

Prime Minister Mariano Rajoy on Monday blamed the swingeing cuts in spending included in this year’s state budget on the errors of the previous administration, and argued that without the austerity drive Spain would face the same fate as Ireland, Portugal and Greece in needing a bailout.

The public deficit last year came in at 8.5 percent of GDP instead of the six percent pledged by the outgoing Socialist government. The Rajoy administration last Friday unveiled an austerity budget including savings of 27 billion euros, in order to meet the deficit target for this year of 5.3 percent of GDP.

“If the previous government had met its deficit target of six percent, the cuts would have been 18 billion euros less,” Rajoy told a meeting of his Popular Party’s executive committee.

Rajoy said there is “no alternative” to unpopular measures such as the budget and a drastic overhaul of the country’s labor laws. “We are taking measures that we don’t like, but we have no alternative,” he said in a speech that was televised for journalists.

Rajoy said that if Spain failed to cut its deficit, no one would want to finance the country.

“This is not theoretical, because it has happened to some EU countries and is happening here in Spain with some public administrations,” he said.