Spanish govt seeks urgent parliament meet on economy

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Spain's government will request an extraordinary meeting of parliament next week to approve reforms boosting revenue by about five billion euros ($7 billion) in 2011, a senior minister said Wednesday.

Prime Minister Jose Luis Rodriguez Zapatero's ministers are expected to agree the revenue-raising reforms in a cabinet meeting Friday, government spokesman Jose Blanco told state radio RNE.

"The government will ask that these measures be approved urgently by the parliament," Blanco said.

"As a consequence, the government will ask for the holding of an extraordinary session as soon as possible for those measures to be approved," he said.

Zapatero would address parliament on the new measures and provide an analysis of the economic situation, he said.

Spain's government hoped that the Congress would agree to hold a parliamentary session as soon as next week, said Blanco, who is also the public works minister.

Finance Minister Elena Salgado has outlined two reforms aimed at raking in an extra 4.9 billion euros this year for hard-pressed government coffers and ensuring Spain meets its deficit-cutting targets.

One reform would save 2.4 billion euros on health spending through the obligatory use of generic drugs, which are cheaper than the major brands.

The other reform would oblige large companies to pay some of their taxes earlier in the fiscal year, bringing in an extra 2.5 billion euros in 2011.

Salgado announced the reforms to try to convince financial markets of Spain's deficit-cutting credentials at a time when its sovereign debt was under attack by traders.

The European Central Bank has since intervened by buying hard-hit Spanish and Italian government bonds on the markets, successfully bringing down their borrowing costs.

Spain's public deficit last year amounted to the equivalent of 9.2 percent of its gross domestic product, or total economic output.

The government has vowed to slice the deficit progressively to 6.0 percent of GDP this year, 4.0 percent in 2012 and 3.0 percent in 2013.

© 2011 AFP

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