Europe’s fourth-largest economy, Spain was reported as having a median 25 percent chance of needing a bailout that would amount to billions of euros. This is significantly better than economists previously feared, Gulf News reported.
Spanish Government Earns Praise for Budget
The numbers come from a recent poll of 29 economists. Experts cited the Spanish government’s improvement in handling the economic crisis as one of the biggest reasons for the good news.
“Having had the experience of Greece and other countries, the Spanish government is being quite nimble in taking early action,” said Alan Clarke, a British economist at Scotiabank. “They know how bad things could get, so I think they’ll be more nimble, as will the European Central Bank.”
Another factor in not including Spain on the bailout list is the Eurozone’s recent success in raising their combined lending ceiling in bailout funds to 700 billion euros.
“Putting that firebreak in place should help at least calm the pressure that’s been on the Spanish and Italian bond market in recent days,” said Investec economist Victoria Cadman. “We also think some of the fears over the need for the Spanish government to turn to international authorities to recapitalize its banks are overdone.”
Spain Cuts Healthcare to Ease Budget Concerns
Spain took early measures in guarding against economic disaster, having implemented harsh austerity measures within their own government.
Just this week, for example, the Spanish government announced that Spaniards would need to start paying more for prescriptions as part of a sweeping cut to healthcare. This includes pensioners who have been receiving their medications for free, Reuters reported.
The cuts are estimated to save the Spanish government seven billion euros annually.
Education Faces Cuts in Spain
Another aspect of the welfare state on the chopping block is education, with Industry Minister Jose Manuel Soria telling media outlets that plans are in place to save three billion euros a year in that department.
“It’s time we end the culture of everything for free,” Soria told Spanish state television Wednesday.
Soria is part of the conservative government of Prime Minister Mariano Rajoy, who took power in December. Rajoy has promised to cut the deficit to 5.3 percent of gross domestic product by the end of 2012.