Spanish prime minister
Mariano Rajoy on Wednesday announced sweeping cuts and tax increases totalling €65bn (£51bn) in austerity measures that opposition politicians warned would sink Spain further into recession.
In a spectacular U-turn, Rajoy raised sales tax by three percentage points, contradicting his government's insistence that this would damage consumer spending, strangle growth and punish the poor.
He also cut unemployment payments, pledged to bring forward a move to retirement at 68 years old and reduced civil service pay. Promised changes to energy laws looked likely to increase electricity tariffs.
The measures came the day after
a leaked memorandum of agreement between eurozone countries and Spain revealed strict conditions for a banking bailout of up to €100bn.
That memorandum insisted that
Spain comply with the recommendations made by Brussels to cut a deficit that reached 8.9% of GDP last year.