With Spain’s official unemployment rate at 26 percent, and the economy projected to contract by 1.3 percent this year, it is difficult to make the case for continued austerity that could push a barely growing economy back into recession. Yet the government is committed to further fiscal...

This paper looks at the planned austerity measures in Spain, the rationale for the spending cuts and tax increases, likely outcomes for future debt-to-GDP ratios, and the probable results of alternative policies.