Spain faces unemployment pain after embracing austerity in European crisis – The Washington Post

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Even while the Socialists were still in power, Spain took the initiative in slashing mercilessly into welfare budgets and reducing salaries, vowing to get a handle on a dangerous pile of deficits and debts. The conservative prime minister elected three months ago, Mariano Rajoy, has pursued the cutback campaign even more vigorously, raising taxes and redoing labor laws.

Leaders aim to hammer out a plan to save the euro, while demonstrators take to the streets to show opposition to austerity measures in cash-strapped countries.

Spain’s drastic belt-tightening has moved government accounts in the right direction for the first time since the European financial crisis erupted last year. But in so doing, it has braked the economy into recession, accelerating a wave of firings and darkening the horizon for millions of workers.

In most of the 17 countries using the E.U. common currency, the euro, this has become the no-win choice leaders have had to make: balance budgets but forsake growth and jobs. Although they regularly promise to stimulate their economies — particularly France’s President Nicolas Sarkozy, who faces elections in the spring — the deep spending cuts required to carve down deficits and public debts have, in fact, strangled economic activity.

Source: washingtonpost.com

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