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Indebted countries to drive through austerity measures

Leaders of the eurozone's most indebted countries are talking tough in a bid to drive through painful new austerity measures.

On Wednesday Greece's Prime Minister raised the stakes in the crisis when he told defiant union leaders the country faced an uncontrolled default on its debts as soon as March unless they accept further cuts. The comments rattled markets.

Today Spain will hope to calm those nerves with new deficit-reduction measures - on top of the 15bn euro (£12.4bn) package of tax hikes and spending cuts announced only days ago. The new conservative government is keen to show it's serious about acting quickly to shore up its public finances.

Guy Hedgecoe reports from Madrid.

  • 05 Jan 2012
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