Spain's Rajoy Seeks $23 Bln in Cuts

Prime minister faces protests in the capital and dissent from regional leaders.

Spanish Prime Minister Mariano Rajoy meets ministers today to approve a 2013 austerity budget as protests in the capital and dissent from regional leaders deepen his predicament amid the prospect of a bailout.

Ministers will explain how Rajoy plans to meet his commitment to cut the deficit by at least 18 billion euros ($23.2 billion) next year, defying tens of thousands of demonstrators who fought with police in Madrid this week. They called for the premier to reverse his budget-cutting drive and resign. Rajoy told a conference in New York yesterday that the “immense majority” of Spaniards aren’t on the street and he still has three years to overhaul the economy.

‘Social Fracture’

“Spain is increasingly slipping out of his hands,” opposition Socialist leader Alfredo Perez Rubalcaba said yesterday in Parliament. “There are clear fractures in Spain and the one I’m most worried about is social fracture.”

Deficit Targets

They may be asked to accept deeper cuts today as the government presents a spending plan designed to reduce the deficit to 4.5 percent of output next year from 6.3 percent in 2012. That means 18 billion euros of spending cuts or tax hikes so long as Spain meets it target for this year.

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