Spain: Juan Carlos cuts royal wages following austerity plan

First debt auction successful, lower borrowing costs

17 July, 16:04

Spanish King Juan Carlos I (archive) Spanish King Juan Carlos I (archive)

(ANSAMed) - MADRID - King Juan Carlos is cutting his own and Prince Felipe's gross salaries by 7.1%, following the 65-billion-euro austerity plan the government approved Friday, royal family sources said on Tuesday.

This equals gross yearly salary cuts of 21,000 and 10,000 euros for the king and the prince, respectively. Juan Carlos makes 292,752 euros a year and Felipe makes 141,376 euros a year. The king is also mandating 7.1% cuts in the expense accounts of the rest of the Spanish royal family.

Members of the government have also taken a 7.1% yearly wage cut, and the same rate will apply to all royal family employees who are ranking ministers.

The royal family, whose expense accounts have been frozen since 2010, already requested a 2% cut last year, taking its overall budget from 8.43 million euros in 2011 to 8.26 million euros currently. Unlike Juan Carlos and the Prince of Asturias, the queen, Princess Letizia and her daughters Elena and Cristina are not paid yearly salaries, but are each assigned expense accounts in proportions decided on by the king.

Also on Tuesday, in the first debt auction since the government approved austerity measures worth 65 billion euros, the Spanish Treasury sold a total of 3.56 billion of 12- and 18-month bonds on Tuesday at lower borrowing costs than those registered in a similar auction in June. The result surpassed the target of 3.5 billion euros worth of bonds set for the sale. Spain sold 2.6 billion euros in one-year bonds at an interest rate of 3.918%, compared to 5.074% last month. The Spanish Treasury also sold 18-month bills at an interest rate of 4.242%, down on 5.107% in June.

The spread between 10-year Spanish bonos bonds and the German benchmark stayed steady at the 558-points mark it opened at on Tuesday.





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