Politics

Spain’s parliament green-lights first state budget since 2018

Madrid, Dec 3 (efe-epa).- Spanish lawmakers on Thursday approved the 2021 state budget in what was a crucial triumph for the minority, left-leaning coalition.

Prime Minister Pedro Sánchez’s Socialist Party (PSOE), which leads the government with partners Unidas Podemos, proposed a boost in public spending to overcome the deep wounds caused by the coronavirus as well as a tax hike on corporations.

Sánchez later tweeted that the “innovative” budget would address “the worst crisis in a century.”

“Spain says goodbye to another era and moves forward dedicated to a future of progress. Thanks to all who have stepped up to move the country forward.”

The current Spanish budget was drawn up by the conservative Popular Party government in 2018, shortly before it was ousted in a no-confidence vote tabled by Sánchez.

The PSOE prime minister’s bid to pass his government’s budget in 2019 flopped, forcing fresh elections.

Regional parties, including Basque and Catalan outfits, got behind the budget on Thursday.

The PP, far-right Vox and center-right Ciudadanos (“Citizens”) were opposed to it, united, among other things, against the government’s reliance on separatist parties.

The budget now heads to the senate for debate, before returning to the lower house of congress for final approval on 29 December.

In managing to approve the budget, the minority government emerges bolstered but it has a goliath task ahead if it is to reverse Spain’s economic woes.

The budget proposed public investment valued at 239 billion euros ($290B) on top of the first tranche of the 27 billion provided by the European Union’s coronavirus recovery fund.

The coronavirus all but wiped out one of Spain’s most important sectors — tourism — which accounts for some 12.5% of the country’s annual GDP.

Around 746,000 Spanish workers remain on the government furlough scheme, according to the latest data from the country’s social security department.

The emergency benefit scheme, first established when much of the country’s industry shut down during the first Covid-19, has cost the state over 13 billion euros between April and October.

The number of registered unemployed workers in Spain sits at around 3.8 million, according to government data.

Spain’s economic could shrink as much as 12.8% this year, according to the International Monetary Fund’s Economic Outlook in October.EFE-EPA

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