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Bracing for big squeeze

September 27, 2012

Spain's government is set to unveil its 2013 budget proposal - which is expected to include even more cuts and strain an already stressed economy. The proposed cuts have been met with two days of violent protests.

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Protesters take part in a demonstration organized by Spain's 'indignant' protesters on September 26, 2012 in Madrid
Image: AFP/Getty Images

The government of Prime Minister Mariano Rajoy was expected to introduce around 39 billion euros ($50.2 billion) of budget cuts for next year.

Rajoy is expected to send a message that Spain can make cuts despite its recession and 25 percent unemployment. Youth unemployment currently stands at around 50 percent. Spanish media has reported that some ministries could see their budgets slashed by up to 40 percent.

The prime minister's right-leaning government has already accepted a eurozone rescue loan for the banks of up to 100 billion euros, but there remains speculation that Spain will need to apply for an international bailout.

Protests against the austerity cuts continued overnight and into the day on Thursday, with thousands of Spaniards gathered outside parliament in the capital,Madrid.

Protests turned violent overnight on Tuesday when officials estimated 6,000 demonstrators took to the streets of Madrid. Police fired rubber bullets at some protesters as they attempted to break into the parliament building.

The website of Spanish newspaper El Pais reported that 26 people were arrested and 64 others injured, 16 of them needing hospital treatment. Among the injured were 27 police officers. More than 1,000 officers were drafted in from across the country to help deal with the dispute.

mz, ccp/pfd (Reuters, AFP, dpa)