Mariano Rajoy has announced the latest round of austerity measures. The general rate of IVA (VAT) is set to rise to 21% from 18%, while the reduced rate for the likes of tourist services will increase from 8% to 10%. The lowest rate for basic necessities (though this does include newspapers) will stay at 4%.
The increases in IVA will come into effect on Friday, 13 July*.
Other measures include a rise in tobacco duty, the elimination of Christmas bonuses for public employees and the scrapping of the deduction on property purchase.
Reactions to the measures: The main unions are looking at calling another general strike. The hotels in the Balearics have called the rise in IVA to 10% a "lethal error". President Bauzá in the Balearics has described the measures as being essential.
* Now being said that the increases will come in on Sunday, 15 or Monday, 16 July.
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