Spanish region unveils more spending cuts

2nd December 2011, Comments 0 comments

The central Spanish region of Castile-La Mancha said Friday it will cut civil servants' wages in a cost-saving programme aimed at meeting tough deficit targets.

The region, home of the fictional hero Don Quixote, plans to save 350 million euros ($470 million) with the latest round of cuts after slashing 1.8 billion euros off the budget in August.

Castile and other Spanish regions splashed out in the years of a profitable real estate boom but have struggled since tax revenues dried up following the property bubble popped in 2008.

Under the new cuts, the roughly 70,000 employees of the government of Castile-La Mancha will see their work hours increased to 37.5 from 35 hours per week as of January 1 while their net salary will be cut by an average of 3.0 percent.

The president of Castile-La Mancha, Maria Dolores de Cospedal, is also deputy leader of the conservative Popular Party, which soundly beat the ruling Socialists in a general election on November 20.

She said the region also would "review" whether it would be able to continue to offer free text books to public school students.

"Today's sweat will prevent tomorrow's tears," Dolores de Cospedal told a news conference.

The red ink running through the accounts of Spain's 17 regional governments is a major concern for the markets, which fear it could compromise the central government's goal to cut the annual public deficit.

Under pressure on the debt markets, Spain is seeking to slash its annual public deficit to 6.0 percent of gross domestic product by the end of 2011 from 9.2 percent in 2010.

It aims to narrow the deficit to 3.0 percent of GDP -- the limit agreed by European Union members -- by 2013.

Under spending cuts already announced by Castile-La Mancha in August, the region's own representative office in Brussels will be closed and 19 regional government companies and foundations will be eliminated.

Popular Party leader Mariano Rajoy will formally take office as prime minister on December 21, putting an end to more than seven years of Socialist rule.

© 2011 AFP

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