Spain and Portugal Cuts

Portugal

Portugal reduces budget deficit from 9.4% of GDP in 2009 to 7% in 2010 to 4.6% in 2011.
Public sector managers pay cut 5%

Tax rises

Corporation tax: +2.5% to a total of 27.5% on annual profits above €2 million

+1% on VAT to total 21%
+1.5% on income tax rates.

Growth rate in Q1 of 2010 is 1% so out of recession

10 year bond rates 4.45%

Cuts of €2.1 billion

Spain

Spain Budget deficit 11.2% in 2009 with aim for 6% in 2011

Spanish civil servants pay cut by 5% and frozen next year Ministers cut by 15% Public spending reduced by €6 billion on top of a €50 billion austerity package in January last – no indexing of pensions, no baby bonus tax relief of €2,500, cuts to regional projects.

+1.5% on income tax rates.

Growth rate in Q1 of 2010 is 1% so out of recession

10 year bond rates 4.45%

Portugal

Portugal reduces budget deficit from 9.4% of GDP in 2009 to 7% in 2010 to 4.6% in 2011.

Public sector managers pay cut 5%

Tax rises

Corporation tax: +2.5% to a total of 27.5% on annual profits above €2 million

+1% on VAT to total 21%

+1.5% on income tax rates.

Growth rate in Q1 of 2010 is 1% so out of recession

10 year bond rates 4.45%

Cuts of €2.1 billion

Spain

Spain Budget deficit 11.2% in 2009 with aim for 6% in 2011

Spanish civil servants pay cut by 5% and frozen next year Ministers cut by 15% Public spending reduced by €6 billion on top of a €50 billion austerity package in January last – no indexing of pensions, no baby bonus tax relief of €2,500, cuts to regional projects.