Spain gives assurances on 2012 austerity budget

Spain's economy minister said the country's austerity budget due Friday will reassure the rest of Europe that the country will not be a candidate for a bailout, AP reported. "Spain is going to stop being a problem, especially for the Spanish people but also for the European Union," Economy Minister Luis de Guindos spoke as he entered an informal meeting of eurozone colleagues in Copenhagen. In Madrid, the Spanish Cabinet prepared to approve a draft 2012 budget expected to include Euro 30 billion ($40 billion) in spending cuts and tax hikes. The passage will come a day after a general strike against labor reforms that crippled public transport and industry and brought hundreds of thousands of people out in protest, but fell short of bringing the country to a standstill. Spanish government estimates put the number of people attending rallies staged across the country at about 800,000. The labor reforms will make it cheaper and easier for companies to lay people off and allow them to cut wages unilaterally. Friday's deficit-reduction package is designed to satisfy EU requirements and calm investors worried about Spain's public finances. Investors' appetite for Spanish debt determines the country's borrowing costs. If the costs are too high, Spain would find it increasingly difficult to finance itself at an affordable rate and eventually follow Greece, Ireland and Portugal in seeking a bailout.