First, there's a lot of giving back and taking away: for example, the wages of public sector workers will be frozen for the third year in a row, but they will bring back Christmas bonuses for all civil servants, which was eliminated last year.
Get it? Give and take.
The government also announced deficit and budget targets, which are likely unrealistic.
Regardless. The Dow rallied 80 points, the euro rallied to the highs for the day.
I've been asked what all this talk that Catalonia is considering seceding from Spain might mean. (See my morning Trader Talk note, Spain Succumbs to Populist Rhetoric, and my Tuesday note, Catalonia: The Next Independent State in Europe?)
Catalonia is the largest and wealthiest autonomous community in Spain, with Barcelona as the regional capital, so this is no minor issue.
Here's my take:
Catalan premier Artur Mas, who has been leading the charge for independence recently, was himself part of the problem. He is part of the same coalition that was in power during the real estate bubble and the profligate spending that got the regional government (and the national government) in trouble. Now he's becoming a raging populist — all to deflect blame for the austerity that everyone is protesting against.
It's ridiculous. Regardless, he is now pushing a referendum on independence from Spain. Eighty-three of the 135 deputies in the regional parliament support independence.
Can this happen? The saner heads give it very small odds. Legal issues aside, the Spanish papers are saying most Catalan business leaders are unlikely to support secession, since the region cannot likely go it alone.
—By CNBC’s Bob Pisani
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