In the first quarter of 2012 Spain needs to save 8,9 million euro. The government wants to reduce the deficit and does this by freezing the salaries of civil servants and higher taxes on income, savings and property.
We have noticed the changes up close. After 5 years of loyal service you suddenly get a contract for a month. You should have had an indefinite contract after being employed three years. Your salary went down last year and this year it drops again a little bit, and suddenly you have to work on some Saturdays. The future is unsure and nobody knows what will happen. Uncertainty and rumors are everywhere. This is what is going on with the personal of hospitals in Spain. The government is cutting back on spending, and doing it rigidly. What will be the result?
Thy cannot stop all these contracts, because it will increase the unemployment rate a lot, and they will have to pay all these unemployed people (there is already an unemployment rate of around 20%). It’s true that an unemployed person gets less money, but his contribution to the economy is zero. On the other hand the uncertainty is resulting in a direct stop in unnecessary spending. A new car… lets wait a while ans see what happens. Slowly the Spanish economy is coming to a stop, and it will be quite a task getting it running again.