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Zapatero defends budget cuts in Spain

May 20, 2011 at 3:48 PM

MAD, Spain, May 20 (UPI) -- Spanish Prime Minister Jose Luis Rodriguez Zapatero said without budget cuts put into place, Spain would have likely required a financial bailout in 2010.

On the eve of regional and municipal elections, Zapatero said Spain would "very probably," have required international assistance, similar to bailouts required by Greece and Ireland, Financial Times reported Friday.

Protesters in Spain, many of them young, camped out in Madrid's Puerta del Sol central square Thursday and Friday. The EUobserver reported many protesters said they would stay put despite a ban on protests imposed by the electoral commission that takes effect Saturday.

The elections are scheduled for Sunday.

High on the protesters' list of concerns was Spain's high unemployment rate, especially among youth, and recent budget cuts Zapatero said were needed to avoid an expensive bailout.

Despite Zapatero's claims, many investors fear a change in government on the local level would reveal many regional and municipal governments have been underreporting their financial difficulties.

"Investors are worried about the regions, given that there has a been precedent in Spain and other countries of debt not being recorded properly," said Luigi Speranza, an economist at BNP Paribas.

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