The Spanish government said today that budget cut measures will take effect soon in order to cushion the anticipated spill over of Greece's debt issues across the eurozone as Prime Minister Jose Luis Rodriguez Zapatero revealed that public sector wages will be slashed by five percent and frozen by next year.

To further save up an estimated $21 billion for the next two years, Spain is set to reduce pensions and regional government funding en route to cutting down the nation's budget deficit, currently standing at 11 percent of GDP.

Spain is being plagued by eurozone's third largest deficit, behind only Greece and Ireland, and the austerity measures are meant to fend off the debilitating effects of the Greek debt crisis.

However, Joan Costa-i-Font of the London School of Economics viewed the proposed budgets cuts as not necessarily belt tightening measures but rather some rectifications from a period of runaway spending.

He said that a case in point is the $3,500 maternity grant set to be junked by the Spanish cabinet this week, as he pointed out that "such excess has been taking place all over Europe - it's not specific of Spain - but Spain for some reason has gone a step ahead as compared to other European economies."

Dr Costa-i-Font is predicting that withholding regional government funding may encounter operational glitches since Spain is a decentralised country "and areas of responsibility such as education, health, social care are the responsibility of regional states."

Painful may be the budget cuts but Spanish socialist MP Juan Moscoso del Prado is convinced that they are necessary and "would pave the way for a better recovery in the future."

He said that Spain will eventually accept the austerity measures notwithstanding economists' assertions that about 13,000 civil servants stand to lose their job due to planned salary cuts that will come with the measures.

Mr Moscoso del Prado argued that the government plan will create a better scenario considering that "we already have a 20 per cent unemployment rate and over 2 million people lost their employment in the last year-and-half."

It remains to be seen should Spain's trade union would be more welcoming to their government's economic plans or would follow the lead of Greece's labour unions who stormed the streets in protest.