Spain parliament OKs austerity push
Thu Jan 12, 2012 3:4AM GMT
The Spanish parliament has endorsed the newly-elected conservative government’s first set of austerity measures, which are aimed at cutting the country’s huge budget deficit.
The measures, which seek to reduce public spending by 8.9 billion euros ($11.5 billion), were approved on Wednesday by 197 representatives in the 350-seat lower house.
The ruling conservative Popular Party, led by Prime Minister Mariano Rajoy, enjoys an absolute majority of 185 seats in the lower house of the Spanish parliament.
Spain’s Treasury Minister Cristobal Montoro has described the measures as necessary, criticizing the former Socialist government’s mismanagement of the economy.
“The economy is stopped, we’re on the verge of a recession and the accounts are unbalanced as a consequence, among other things, of the deplorable decisions taken by the former government, which only made the situation worse,” he said.
He also accused the Socialists under former Prime Minister Jose Luis Rodriguez Zapatero of deliberately covering up figures that showed Spain’s 2011 budget deficit was eight percent of its national income. The previous government had put the figure at six percent.
The new austerity package includes income and property tax hikes as well as a freeze on salaries paid to the civil servants.
With 4.9 million unemployed people, Spain has the highest jobless rate of 21.3 percent in the eurozone.
Hit by the global financial downturn, the Spanish economy collapsed into recession in the second half of 2008, destroying millions of jobs.
The worsening eurozone debt crisis has raised Spain’s financing costs and created fears that the European country might have to seek an EU bailout like Greece.