Spain: Deficit much larger than expected

 The Spanish government announced that the budget deficit for the year would be much larger than predicted earlier. The target was for the deficit to be 6 per cent of GDP. The actual deficit came in at 8 per cent of GDP.
   The Spanish government reacted to the larger deficit by increasing taxes and freezing wages. In addition the government cut public spending by 11.5 billion U.S. The deputy prime minister said: "This is just the beginning ... We're facing an extraordinary and unexpected situation, forcing us to take extraordinary and unexpected measures,"
   An economist at Barcelona University said that the measures would probably make the recession even worse. The defeated socialist government had taken measures that enabled Spain to fare somewhat better than Italy or Greece it now seems as if Spain faces a worsening debt situation as well. For much more see this article.