Spain plans to save more than 10 billion euros ($13 billion) from health and education programs and will accelerate the sale of banking stakes to reduce the budget deficit amid the European debt crisis.
Prime Minister Mariano Rajoy met today with ministers to discuss measures to eliminate overlaps and boost efficiencies in health and education, the government said today in a statement. Spain will also speed up the sale of its majority stakes in lenders while studying ways to increase access to credit, the administration said.
Rajoy, who took office in December, is trying to narrow the deficit to 5.3 percent of gross domestic product this year from last year’s 8.5 percent. Investors, concerned he won’t be able to manage Spain’s biggest deficit reduction in at least three decades, last week pushed yields on Spanish debt to the highest since December. Rajoy twice last week referred to the possibility of Spain seeking a bailout.
Spain today reiterated its goal of cutting the deficit to 3 percent of GDP in 2013 as it expects new financial-stability measures and “structural reforms” will reverse the recession and stop job-destruction, it said.
The regional governments’ deficit will be cut to 1.5 percent of GDP this year, the central government said in the statement. Regional governments had an average deficit of 2.9 percent last year, and their overspending was the biggest cause for Spain’s overshooting its 2011 deficit goal by 2.5 percentage points.
The Spanish government said it will take steps in the next few weeks including state-asset sales and changes to boost savings and the competitiveness and flexibility of the economy. It cited energy and housing-rental rules as targets, as well as measures to improve entrepreneurship and research.
Earlier today Economy Minister Luis de Guindos said in an interview with Cadena Ser radio station that Spain should consider making wealthier people pay for some of their health care as the country strives to narrow its budget deficit.
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