Spanish gov't unveils new savings plan

The Spanish government on Friday unveiled its new savings plan, expecting to cut a total of 102 billion euros (125 billion U.S. dollars) of spending by 2014, in an effort to balance the strained public finances. The biennial budget plan for 2013 and 2014, with the deficit target of 4.5 percent and 2.8 percent respectively, was required by the European Commission which allowed Spain to postpone the EU standard of 3.0 percent for another year. The plan also predicted that the Spanish GDP will fall by 0.5 per cent in 2013, but would pick up to 1.2 percent in 2014 thanks to private consumption, investment and structural reforms. The release of the budget came after the European Central Bank (ECB) President Mario Draghi's announcement on Thursday that the Bank would take "unconventional measures "to alleviate tension on the markets. However, the markets remained sluggish due to the lack of precision of his words. It was also on Friday that the Spanish Prime Minister Mariano Rajoy said that he had not yet taken any decision regarding asking for help to the European Financial Stability Facility (EFSF) following a cabinet meeting, yet another signal of a final bailout request. "I have not yet made any decision. We still don't know exactly what is being planned. We can't act irresponsibly," he said.