Parliament approves austerity budget in Spain

The Spanish parliament has preliminary passed a new budget, which the opposition slammed as deepening the country’s recession and poverty.

The 2013 budget was approved by 179 votes to 148 on Wednesday, and it will now pass through parliamentary commissions and the senate before its definitive approval in December. 

Prime Minister Mariano Rajoy’s conservative People’s Party (PP) has an absolute majority in parliament and all other parties, with the exception of one small party close to the PP, either voted against or abstained.

This means that spending by government ministries is likely to be slashed by 8.9 per cent. 

The budget for the health sector will be cut by 22.6 per cent, the culture budget by 19.6 per cent, investments in infrastructure by 15 per cent and development aid by 23 per cent. 

Protests

On Tuesday, thousands of Spaniards assembled near parliament in the capital Madrid to protest against government austerity cuts they say are punishing the poor.

Surrounded by fleets of riot police vans, the crowd gathered in front of police barriers blocking the road to the lower house of Congress where legislators were debating the 2013 budget.

Clashes with police have broken out on the fringes of several mass protests in Spain over recent months, but no incidents were reported on Tuesday evening.

The new budget includes $50bn worth of crisis savings measures.

Demonstrators called for the resignation of members of the two main political parties, the ruling conservative Popular Party and the opposition Socialists.

Protesters’ anger has been fanned by the offering of a loan of up to $129bn by Spain’s eurozone partners to rescue the country’s stricken banks, which Spaniards blame for the crisis.

The economic crisis, blamed on the collapse of a speculation-driven real estate boom, has plunged Spain into recession, throwing millions out of work and many families into poverty. Unemployment is close to 25 per cent.

The Bank of Spain said on Tuesday that the recession continued in the third quarter of 2012 when output shrank by an estimated 0.4 per cent.