Morning Forex Fundamental: EUR

Morning Forex Fundamental: EUR

'There will be no relaxing of the austerity drive because we believe in this policy' - Spanish government

Spain's government will unveil new measures later aimed at reviving the economy, a day after the unemployment rate soared to a new high, raising concerns that the economy is far away from recovery. The nation's Prime Minister Mariano Rajoy is going to present a package of reforms and more austerity measures, which will be implemented by 2015 to cut its public deficit and to turn around the economy in time to win re-election. Measures will be mostly aimed at the reduction of unemployment benefits, constantly growing energy tariff deficit, and will make permanent the temporary tax hikes, which occurred in 2011 and 2012. However, Spaniards are hoping the government will heed their calls for mercy and will review its strategy. On Thursday, data showed that nation's jobless rate shot up to a record 27.2%, up from 26.0% in the previous quarter, with more than 6 million Spaniards being out of work.

'There will be no relaxing of the austerity drive because we believe in this policy. Having said that, with all Europe in recession, it would be absurd not to adjust the deficit-cutting path,' a government source said on condition of anonymity on Thursday.

'The plan will be a specific, comprehensive and credible set of structural reforms rather than spending cuts for the sake of spending cuts,' the source said.