Spain on Saturday said it plans to immediately reduce its deficit by more than one percentage point with a brand-new austerity package aimed at saving billions next year.
"These first steps which involve both public revenues and spending will lead to an immediate reduction of the budgetary imbalance by more than one percentage point," a decree in the government gazette said.
It said the aim was to reassure worried markets about the health of the economy and "allow the public sector to stabilise as well as to bring credibility to debt and deficit targets."
Spain's new right-leaning government on Friday unveiled spending cuts and taxes increases to claw back 15.1 billion euros ($19.6 billion) in 2012.
Budget cuts will total 8.9 billion euros. The measures include lopping 1.6 billion euros off public works, and another a billion euros each off the foreign, economics, regional and industry budgets.
The government pushed up taxes including on salaries and on capital income to bring in another 6.275 billion euros. Taken together, the spending cuts and higher taxes amount to 15.1 billion euros.
Spanish Deputy Prime Minister Soraya Saenz de Santamaria said the deficit at the end of this year would be "around eight percent" of GDP, far higher than the six percent targeted by the outgoing Socialist government.
Prime Minister Mariano Rajoy is aiming for a deficit of four percent of GDP in 2012 and three percent in the following year.
The new government led by Rajoy won power in November 20 elections and has set a tight timetable for reforms to fix the economy.