Spain's new austerity plan will save 56bn euros

Spain's new austerity plan will claw back 56 billion euros ($69 billion) for the state between now and 2014, according to figures published Saturday by the economy ministry. That figure excluded the effects of a planned energy and environment tax, said the document, which was published on the ministry website. "The estimated impact of these measures is approximately 13.5 billion euros in the remainder of 2012, 22.9 billion euros in 2013, and 20 billion euros in 2014," the English-language document said. That total of 56.4 billion euros set out in the document still leaves a shortfall of some 8.6 billion euros if the government is to make the 65 billion euros in cuts required by the European Union. Recent press reports have suggested that this sum will come, at least in part, from a sharp rise in electricity bills for industry and households. Saturday's ministry statement said only: "This calculation excludes the valuation of the impact of further measures, including energy and environmental taxation, which will be announced at a later date." This week Spanish Prime Minister Mariano Rajoy -- obliged by the European Union to order new cuts and tax increases to meet deficit-cutting commitments -- revealed Spain's new 65-billion-euro austerity package. The measures included a sales tax rise, lower jobless benefits, and public sector pay cuts. The government approved the package on Friday, and that evening thousands of people protested on the streets of Madrid. In July, Spain is to become the fourth eurozone country, after Greece, Ireland and Portugal, to get bailout funds when it receives the first tranche of a 100-billion-euro kitty for its banking sector. Eurozone finance ministers agreed this week to release a payout of 30 billion euros by the end of the month, and 45 billion euros in mid-November. But in an interview published Saturday, Germany's central bank chief suggested Spain would need more than the bailout for its ailing banks. European help for Spain should target the entire economy and not just the banking sector, Bundesbank chief Jens Weidmann told the Boersen Zeitung. "The banks' balance sheets are a reflection of the overall economy," he was quoted as saying by the financial newspaper. Spain's own figures, including a record 24.4 percent unemployment in the first quarter, showed Spain still had major issues to resolve, he argued.