Spanish government looks to reduce budget deficit
The Spanish government is today in talks with unions in relation to a number of proposed changes to taxation and labour regulations in the country. Last week the government announced a 5% reduction in public sector pay as the challenge of reducing the country's soaring budget deficit continues. While there are concerns that we could see an increase in union unrest within the country, in many ways the government has no choice but to push through unwelcome and unpopular changes.
Many people believe that, after the Greek debacle, the whole future of the European Union is now in doubt as more and more countries struggle with growing budget deficits and financial constraints. The European Union is now starting to play hardball and recently suggested that the UK, not part of the euro zone, would not be eligible for financial assistance if the UK currency came under pressure and UK finances were stretched further.
There are signs that the euro zone is pulling together to the detriment of Europe as a whole and those countries which have yet to adopt the euro. The UK has always played a prominent part in European trade markets although if protectionism levels are increased in the future there's every chance the UK will be forced to choose between full entry into the euro zone or a place on the sidelines.
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