Spanish Prime Minister Mariano Rajoy announced tax increases and spending cuts totaling 65 billion euros ($80 billion), risking a deepening recession to keep the euro financial crisis at bay.

Rajoy's fourth austerity package in seven months will raise the sales levy to 21 percent from 18 percent; scrap a tax rebate for home buyers; scale back unemployment benefits and study pension cuts; consolidate local governments and eliminate the year-end bonus for public workers. The budget measures, covering the next two-and-a-half years, are about double those previously announced.

The prime minister addressed Parliament in Madrid today as European officials put the finishing touches to a 100 billion-euro bailout for Spain's banks. The amendments to the budget come less than two weeks after it went into effect and a day after the European Union loosened Spain's deficit targets.