The country's new government announced $11.5 billion in fresh spending cuts Friday, saying the budget was in worse shape than the previous government had acknowledged.  It also announced a freeze on pay for civil servants and a two-year income tax hike.

　　Deputy Prime Minister Soraya Saenz de Santamaria was quoted by the Associated Press as saying the cuts are just "the beginning of the beginning" and that the government would be forced to take "extraordinary measures" in 2012.

　　The spending cuts and tax hikes come as the new conservative government of Prime Minister Mariano Rajoy announced the country's budget deficit was bigger than anticipated - totaling 8 percent of Spain annual income and not the 6 percent that was expected.

　　Despite the problem, Mr. Rajoy's government did say it would increase pensions by 1 percent, making good on a campaign pledge.

　　Spain's economy has already been hit hard by unemployment, with the country's more than 20 percent unemployment rate the highest in the European Union.

　　Meanwhile, Germany's finance minister is offering hope for 2012.  In a newspaper interview, Wolfgang Schaeuble said he believes the 17-nation eurozone will bring the debt crisis under control in the new year.

　　Despite the gloom that has hung over much of Europe, Parisians are trying to usher in the new year in style.

　　Many have been out shopping for luxury items - like shellfish, lobster and champagne - for a special meal.

　　Some shoppers say they are trying not to think too much about the hard economic times and want to treat themselves and their families.  But fishmongers say most shoppers are being more thrifty with their spending than in years past.