Spaniards protesting against the government’s new labor reform on March 29, 2012.
The Spanish government has unveiled harsh budget cuts one day after a nationwide general strike against tough new labor reforms paralyzed the country.
Spain’s Deputy Prime Minister Soraya Saenz de Santamaria announced on Friday that the government plans to save more than 27 billion euros in its 2012 budget through freezing civil servant salaries and ministerial spending cuts.
"The ministries will see an average reduction of 16.9 percent ... there will be adjustments of over 27 billion euros through revenues and through spending," she added.
Madrid says the spending cuts are needed to reduce the country's deficit to 5.3 percent of gross domestic product (GDP) this year from 8.5 percent last year.
The Spanish government announced 15 billion euros in cuts in December. Prime Minister Mariano Rajoy warned that the country is facing a “very, very austere budget” in which billions more is expected to be cut.
On Thursday, anti-austerity strikers took to the streets of several cities across the country to protest against the government's tough new labor reforms, which facilitate lay-offs.
The labor Reforms, approved by Rajoy's government on February 11, allow Spanish companies to pull out of collective bargaining agreements and have greater flexibility to adjust employee schedules, workplace tasks and wages, as well as making it easier and less costly to fire workers.
Spain's unemployment rate hit a 17-year high of 22.85 percent at the end of 2011, giving the country the highest rate among the 27 EU member states.
Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, taking down millions of jobs with it. Analysts say Spain's economy is expected to enter into a new recession in the first two quarters of 2012.