Spain's Zapatero shores up government by deal with Basques

16th October 2010, Comments 0 comments

Spanish Prime Minister Jose Luis Rodriguez Zapatero has shored up his minority Socialist government ahead of a key budget vote with a deal with moderate Basque nationalists, the parties said Saturday.

The deal with the centre-right Basque Nationalist Party (PNV) will also see further powers devolved to the Basque regional government and more investments there by the central government.

"The PNV has concluded an accord on economic, political and institutional stability with the Socialist group in parliament" that will lead to the full implementation of the statute on Basque autonomy, the party said in a statement.

The accord signed Friday will ensure the support of the PNV's six deputies in the national parliament on the Soclialist government's contentious 2011 austerity budget.

Zapatero's Socialists hold only 169 seats in the parliament, short of an absolute majority of 176.

With financial markets still jittery about Spain's public deficit, Zapatero intends to slash state spending by eight percent next and raise taxes, but if it cannot secure its approval by the end of the year it will be forced to call early elections.

The Socialists said in a statement that the accord with the PNV will "go beyond the strict approval of the budget" and will ensure stability for the country.

In addition to applying the statute on Basque autonomy, which the Spanish central government has yet to do, the Socialists are to support making an additional 112 million euros (157 million dollars) in investments in the Basque region in 2011 following an earlier deal on transferring jobs and social security powers.

Mariano Rajoy, the leader of the opposition People's Party, criticised the deal as allowing Zapatero "to stay in power for another year while harming the country", in particular by transferring more powers to the Basque country.

Spain is due to hold general elections in 2012.

© 2010 AFP

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