Spain plans to increase the income gap between %99 and %1 by 2014

Spain has said that it plans to cut its spending by 102 billion euros (125 billion dollars) in two years.

The Spanish government said on Friday that the cuts included an austerity package of 65 billion euros (80 billion dollars) of tax hikes and spending cuts announced in July.

The cuts also include a rise in value added tax and abolishing public workers’ Christmas bonuses, the government added.

A statement published on Spanish Prime Minister Mariano Rajoy’s official website late on Friday said the government had submitted to the European Commission an outline of spending cuts and revenue increases to 2014.

The “adjustment” will save 13.1 billion euros (16 billion dollars) this year, 39 billion euros (47.8 billion dollars) in 2013 and 50.1 billion euros (61.4 billion dollars) in 2014.

The budget plans will be presented to the European Commission, which demanded more austerity measures.

Rajoy has defended the move, saying Spain’s external debt of 900 billion euros is a great burden. Madrid is trying to trim its budget deficit from 8.9 percent of gross domestic product (GDP) in 2011 to 2.8 per cent in 2014.

The Spanish economy, the fourth-largest in the 17-nation eurozone, is suffering from the aftershocks of a real estate bust that has devastated not just the banks, but families as well.

Battered by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, taking with it millions of jobs. Unemployment is approaching 25 percent.

The worsening eurozone debt crisis has increased Spain’s financing costs and the country is seeking a European Union bailout similar to the one Greece received.