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Spain PM candidates offer wealth tax, structural reforms

The candidates for prime minister in Spain’s elections unveiled their plans to revive the battered economy on Monday, with the Socialist leader promising a wealth tax and his conservative opponent backing more structural reforms.

Alfredo Perez Rubalcaba of the governing Socialist Party confirmed his electoral programme included new taxes, one for banks and the other for the wealthiest section of the population.

The first would bring in more than 1.0 billion euros ($1.4 billion) and the second 1.4 billion euros ($2.0 billion), or “a total of 2.5 billion euros and all will go towards creating jobs,” he told Cadena Ser radio.

Spain has the highest unemployment rate among industrialised countries — 20.89 percent — and candidates from both the left and the right have made employment their priority for the November 20 elections.

“The wealthiest must pay more because we are in a complicated situation,” he said.

On the banks, he said “we have leant them money but they must do their part.”

Spain’s banking sector was badly hit by the collapse of the booming property market in 2008, but has since been overhauled, with 12 billion euros of public fund already invested.

Spain has struggled to emerge from recession and posted timid growth of just 0.2 percent in the second quarter.

The head of the main conservative opposition Popular Party, Mariano Rajoy, blasted Rubalcaba’s plan for a wealth tax as “demagoguery.”

“I have no intention of raising taxes but of encouraging economic growth,” he told Cadena Ser. “I have only one priority, which is that there is economic activity and for that the heads of industry must be supported.

“The policies that must be adopted in the future must combine two things: A clear and strong control of public spending and an ensemble of structural reforms.”

Rajoy said his plan would be implemented while “respecting the basic public services.”

He cited as an example the huge cuts announced by the Popular Party last week in the Castilla-La Mancha region to trim a bloated public deficit.

He said Spain’s 17 regions would also have to “tighten their belts.”

The Popular Party, which blames the Socialists for Spain’s economic ills, is riding high in the opinion polls ahead of the vote.

The most recent poll, in the conservative daily El Mundo on Sunday, predicted the Popular Party would win 47.1 percent of the vote to 32.3 percent for the Socialists.

Prime Minister Jose Luis Rodriguez Zapatero, who has been in office since 2004, has decided not to run for a third term. Rubalcaba, his former deputy and interior minister, was chosen in July as the Socialists’ standard bearer.

The Socialists were crushed in local and regional polls in May, when a huge swathe of the electorate, furious over Spain’s economic crisis, abandoned the the party in favour of the Popular Party.