Spain’s Catalonia plans fresh austerity cuts

Spain’s Catalonia region Tuesday announced fresh plans to cut public sector pay and other austerity measures to rein in its deficit as it scrambles to shore up its finances.

Catalonia, which like other Spanish regions is under pressure from the central government to help bring Spain’s deficit down, said it would cut salaries, raise taxes and make patients pay part of their health prescriptions.

The proposed cuts, announced by the autonomous region’s president Arturo Mas at a news conference, were the first fresh austerity measures to be announced since the right swept to victory in a national election on Sunday.

“As president I had to reflect on where we had to make cuts,” Mas said, explaining that the proposed cuts will have to be approved by the Catalan parliament to enter into the 2012 budget.

“The government has not yet approved anything and will not do so this week,” he said.

Mas did not detail the scale of the pay cuts but said they would affect all public sector employees in the northeastern region where austerity measures this year have already caused hospitals to reduce services.

He added that the proposals included increasing taxes on petrol, water and transport and raising university enrollment fees.

Catalonia is one of the engines of the Spanish economy but is under pressure to help Spain lower its overall deficit.

The national government has set a deficit limit of 1.3 percent of Gross Domestic Product for each of the 17 regions. Catalonia’s deficit is running more than double that level this year.