Bezuinigingsmaatregelen aangenomen door Spaans parlement (en)
The Spanish parliament has passed a package of government-backed austerity measures by the narrowest of margins - just one vote - with the political fallout potentially leading to early elections.
A minority Socialist government headed by Prime Minister José Luis Rodríguez Zapatero i managed to squeak the result through a dubious legislature on Thursday (27 May), thanks in part to the abstention of the Catalan Convergència i Unió party (CiU).
Politicians from all sides criticised the €15 billion package of spending cuts that aims to reduce the country's budgetary deficit from 11.2 percent of GDP to 6 percent in 2011.
Spanish finance minister Elena Salgado defended the plans in front of MPs, saying the measures were "painful but unavoidable". They include a five percent cut in civil servant pay from next month, a pension freeze and reductions in public investment spending.
The government hopes the cuts will help take market heat off the southern economy.
An EU-IMF bail-out agreement for Greece last month turned investors' attention towards Spain and Portugal, forcing their administrations to announce additional deficit cutting measures as part of a wider EU agreement to create a €750 billion support mechanism for struggling eurozone governments.
In abstaining from Thursday's vote, regional Catalan party spokesman Josep Antoni Duran i Lleida said his party's decision was designed to avoid Spain suffering the same fate as Greece. But he added that Mr Zapatero's time in office was "finished."
"The problem isn't the pensioners or the civil servants or the pharmacies," he said. "The problem is you and your government."
Mr Zapatero's administration is due to expire in 2012, but with the CiU indicating they will not support the government's 2011 budget, early elections are looking increasingly likely.
Growing civil unrest against the austerity measures is adding to embattled leader's problems, with civil servants already expected to strike next month over the cut in their wages.
The main centre-right opposition Popular party justified its opposition to the measures saying they would impact on society's weakest. "Yes, let's cut the deficit," said party leader Mariano Rajoy, "but not like this."
The narrowness of Thursday's decision is unlikely to add to investor confidence, creating doubts over the government's ability to implement the unpopular austerity package.
Early elections and the prospect of a new government could also dampen the momentum for reform, said analysts, with a centre-right administration likely to face greater difficulty in winning the support of unions.
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