Spanish government in deal to pass 2011 austerity budget

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Spanish Prime Minister Jose Luis Rodriguez Zapatero's ruling Socialist Party sealed a deal Monday with a tiny regional party that assures passage of his minority government's 2011 austerity budget.

The small Canary Islands Coalition, with two seats in the 350-seat parliament, agreed to vote in favour of the the budget in exchange for the transfer of some powers to the regional government of the archipelago such as the authority to carry out job training.

The government sealed a similar deal on Friday with the centre-right Basque Nationalist Party (PNV), which has six seats in the assembly.

"The country wins, Spain wins," the president of the Canary Islands Coalition, Paulino Rivero, told reporters as he announced the agreement following a meeting in Madrid with Zapatero.

With 169 seats in Spain's 350-member assembly, Zapatero's Socialists are seven seats short of a majority and pass legislation on a vote-by-vote basis.

There had been some doubt as to whether the government would be able to pass the budget since government austerity measures introduced over the past year along with a reform of labour laws to make it easier to fire workers has cost the Socialists the backing of smaller parties futher to the left.

Failure to approve the budget would have almost certainly forced Zapatero to call early elections. The next general election is not scheduled until 2012.

The budget pledges to cut spending next year by 7.9 percent to 122 billion euros (170 billion dollars). It is expected to be approved in December.

© 2010 AFP

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