Spain, Greece launch new austerity plans amid low eurozone confidence

Debt-ridden Spain and Greece Thursday launched new austerity plans to keep eurozone bailout that is crucial to save their shaky economy. However, situation in the eurozone is not optimistic as its economic confidence has slipped to lowest level since 2009. Spain planned to cut its overall spending by 40 billion euros (51 billion U.S. dollars) for the year of 2013, according to the country's new austerity plan released on Thursday. The budget austerity is expected to get the country out of crisis, said Spanish Deputy Prime Minister Soraya Saenz de Santamaria. The fourth largest economy in the eurozone is asking the European Central Bank (ECB) to unlimitedly purchase its government bonds so as to lower its borrowing costs. The austerity plan would be a signal released to fellow eurozone countries and the EBC for not imposing further austerity if Spain asks for international bailout. Meanwhile, the Greek coalition government also issued an austerity package of 13.5 billion euros (17.4 billion dollars), which will be presented at a meeting by eurozone finance ministers on Oct. 8. [ The Greek government has to boost state revenue by an additional 2 billion euros (2.5 billion dollars) in the next two years through collecting more tax and to slash 11.5 billion euros (14.9 billion dollars) in national spending, according to the austerity package. The Greek coalition government hopes that launching the new plan will be enough to meet the targets demanded by its international lenders and keep the vital bailout loans coming. International bailouts have played a significant role in keeping Greece alive since 2010. In exchange, the country has to impose painful and strict austerity program such as slashing spending and hiking taxes. Encouraged by the active steps of Spain and Greece, international markets rose on Thursday. In the United States, the Dow Jones Industrial Average increased 72.46 points, closing at 13,485.97. The Standard & Poor's 500 Index gained 13.83 to 1,447.15, snapping a five-day slump. The price of gold also surged Thursday. Gold for December delivery increased 26.90 U.S. dollars to finish at 1,780.50 dollars an ounce on Thursday. With its gloomy economic future, Italy also pledged continued efforts to further strengthen fiscal sustainability and enhance potential growth, which was affected by the global financial crisis over the past years. "Italy will continue to do its part to further strengthen fiscal sustainability and enhance potential growth," Italian Prime Minister Mario Monti told the UN General Assembly Wednesday. On Thursday, Germany ratified a eurozone's permanent 500-billion-euro (645-billion-dollar) rescue fund which is key to solving the ongoing European crisis. However, the German Federal Labor Agency warned that Europe's largest economy will encounter a downturn in the second half of 2012, saying it is a result of European debt crisis. Germany is always considered as the engine of the European economy. Moreover, a survey also poured cold water on the eurozone situation. The European Commission said Thursday that economic confidence in the 17-country bloc that use the euro fell to lowest level since 2009. The European executive organ said economic confidence, as a sentiment indicator, dropped by 1.1 points in this month to a read of 85, the lowest level since the eurozone has tortured by economic recession following the regional banking crisis. The indicator has been slipping for seven months, proving that economic confidence has been slashed seriously by crisis swept Europe, said the European Commission, the executive arm of the European Union.