Spain hikes consumption tax to address deficit

Spain raises value-added tax by three percentage points to 21 percent as part of an effort to slash the public deficit....

The Organisation for Consumers and Users, or OCU, estimates the tax hike will increase the average family's spending by 470 euros a year....

Defaults on consumer and mortgage loans have soared in Spain, and evictions from homes have also jumped. Companies and the public sector have cut wages. The government does not expect an economic recovery to start until next year and job creation may still be several years off.