Budget Cut Pinch for Spain's Royal Family

For the first time in history, Spain's royal family is getting its annual budget tweaked a bit thanks to the measures of the austerity-minded Socialist government. King Juan Carlos and his family already had their budget frozen in 2010 as the country faced up to harder economic times.

In the latest tight-fisted budget for 2011 presented to parliament Thursday, the government actually trims the royal budget by 470,000 euros, or 5.2 percent, to 8.43 million euros.

According to Spanish media, the royals themselves had proposed the cut, suggesting a reduction of between seven and nine percent.

Until this year, the royal budget had increased annually. But Spain is now under international market pressure to cut spending, reform labour markets and promote growth.

A report in Britain last week said Queen Elizabeth II had been forced to give up the ultimate control of her finances to the British government under a secret deal agreed in 2006.

The deal, quoted in The Independent newspaper, stipulated that in the event of "irreconcilable difference" the government can stop payments and take over the financial management of the palaces itself.

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Britain's royal family cost taxpayers 38.2 million pounds (46.1 million euros, 57.8 million dollars) in the 2009-2010 financial year, down 7.9 percent on the previous year.

Source-AFP