Spain budget cuts

Spain has announced a 27 billion-euro cut from its budget this year as part of what has been described as one of the toughest austerity drives in its history.



The changes will reportedly include freezing public sector workers' salaries and reducing departmental budgets by 16.9 per cent.



The government said it will raise 12.3 billion euros this year, aided by an increase in tax for large companies.



It said its top priority is to clean up public accounts.



However,economists are questioning whether the cuts will be enough to satisfy Spain's European partners.



Last month, Prime Minister Mariano Rajoy agreed with the European Commission to reduce Spain's deficit to 5.3 per cent of GDP in 2012.