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Spanish parliament approves austerity plan by one vote
27 May 2010 @ 15:12

Spain's parliament Thursday approved by just one vote an unpopular 15-billion-euro austerity plan aimed at reining in its massive public deficit and easing fears of a Greek-style debt crisis.

The draft law, which includes a pay cut for civil servants, was passed with 169 votes in favour and 168 against.

The governing Socialist Party backed the bill while all others, including the conservative opposition Popular Party, either opposed or abstained.

Prime Minister Jose Luis Rodriguez Zapatero does not hold a working majority and must rely on smaller parties to govern.

The text only passed due to the abstention of the 11 deputies of the Catalan nationalist CiU party.

CiU secretary general Josep Antoni Duran i Lleida called for "responsibility" from his deputies in not voting against the bill but at the same time, he criticised Zapatero and urged him to call new elections in the coming months.

Zapatero, under pressure from both Spain's EU partners and the markets, announced the austerity measures on May 12 in a bid to shore up Spain's public finances amid fears it could follow Greece into a debt crisis.

The cuts are on top of a 50-billion-euro austerity package announced in January designed to slash the public deficit to the eurozone limit of three percent of gross domestic product by 2013 from 11.2 percent last year.

The latest measures include an average five-percent pay cut for public sector workers from June and a pay freeze from 2011. Pensions, except for the poorest, will also be frozen in 2011.

The government also plans to scrap a 2,500-euro payout to parents for the birth of children, a key part of Zapatero's social platform to boost Spain's flagging birth rate.

The salaries of Zapatero and government ministers will also cut by 15 percent and those of secretaries of state by 10 percent.

Unions representing public sector workers have called a strike for June 8 over the austerity plan while Spain's largest trade union, the CCOO, said last week it would "probably" also call a national general strike.

Source: AFP/Yahoo Finance

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