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Paris (UPI) May 28, 2010 Governments across Europe have begun to prepare their citizens for painful austerity measures in a bid to contain the effects of the debt crisis, sparking mass demonstrations in several countries. In France, tens of thousands of workers took the streets to protest pension reform plans unveiled by President Nicolas Sarkozy. He has identified raising the retirement age as one of his key reform priorities, with media reports suggesting a raise of 1-3 years from the current age of 60 -- one of the lowest in Europe. Unions calling their members to the streets Thursday said there will be more strikes in the days to come. They went on strike some two months ago after Sarkozy unveiled a set of social and economic policies intended to reduce the public deficit. Also Thursday, Spain's embattled Prime Minister Jose Luis Zapatero pushed through a set of groundbreaking austerity measures aimed at reducing the country's huge deficit and boost confidence in the euro, the common currency of 16 EU nations. The program, which adds up to around $18.5 billion in savings this year and next, passed by just one vote in Parliament. It includes a 5 percent public sector pay cut, the freezing of pensions and the end of a $3,000 check handed to new mothers. Friday, the Spanish government added that it would cut 2011 spending by 7.7 percent. Spain is one of Europe's most embattled economies with a budget deficit of of more than 11 percent of gross domestic product and an unemployment rate of just more than 20 percent. Similarly plagued Italy has announced austerity measures worth nearly $30 billion. Rome wants to bring the public deficit from 5.3 percent of GDP product in 2009 to 2.7 percent in 2012, thus staying under the EU's 3 percent limit. The government of Prime Minister Silvio Berlusconi wants to bring down its 115.8 percent of GDP debt -- one of the highest state debts in the world -- by increasing finance market taxes and slashing banker bonuses. Even Germany, Europe's largest economy, aims to bring down its deficit. Berlin this month announced 2011 budget cuts of $13.5 billion. The European debt crisis first surfaced in Greece, which had to ask for a massive EU bailout package in the face of public bankruptcy. The EU forced Greece to adopt stringent austerity measures that include rising taxes, cutting pensions and freezing salaries in order to unlock money from a personalized $150 billion rescue fund. The austerity measures sparked social unrest in Greece. Officials in Europe fear that the Greek crisis could infect similarly indebted countries like Portugal, Spain, Ireland and Italy.
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