Zapatero approved as Spanish PM

Socialist party leader faces difficult economic challenges after construction slump.

     Zapatero will be searching for answers
    to Spain's economic difficulties [AFP]

    The new prime minister is expected to announce a $34.8bn fiscal stimulus to compensate for a sharp slowdown in the construction industry.
     
    It will include a $630 rebate for tax payers, incentives for construction companies, and a still-to-be-announced payment for unemployed immigrants to go back to their home countries.

    Global crisis

    Addressing parliament before the vote, Zapatero said: "Don't have any doubt that the government will respond urgently to the effects of the global crisis in Spain, with short- and longer-term measures."

    The International Monetary Fund says Spain's economy will only grow by 1.8 per cent this year, down from 3.8 per cent in 2007, as the credit crunch hits heavily-indebted businesses and household.

    Zapatero is expected to announce his new government as early as the weekend, after being sworn in by King Juan Carlos.

    Many senior ministers, including Pedro Solbes, the economy minister, are likely to keep their current portfolios.

    However, the key industry ministry is expected to change hands.

    The Socialists, who do not have an absolute majority in parliament, as was the case in their previous term in office, aim to negotiate support for legislation with smaller parties including moderate Catalan and Basque nationalists.

    Zapatero is the first political leader since the death of General Francisco Franco in 1975 to need a second vote to be sworn in after winning a general election.

    SOURCE: Agencies


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