Spanish PM Proposes Austerity Cuts

Andres Kudacki / AP Photo

Spanish Prime Minister Mariano Rajoy proposed an austerity budget for 2013 amid rumors that the country will seek a bailout. The budget, called a “crisis budget designed to exit the crisis” by Deputy Prime Minister Soraya Saenz de Santamaria, imposes a pay freeze on public-sector employees and a 20 percent tax on lottery winnings—but protects pensions. Yet the budget is unlikely to please the Spanish people, with tens of thousands protesting Madrid. A stress test of the country’s banks is set to be released on Friday, while Spanish stock slightly rebounded in early trading on Thursday after falling sharply on Wednesday.