Spain to vote on austerity plan

Spain's parliament will today hold what is expected to be a tight vote on whether to approve the government's plans to cut €15 billion off the fiscal deficit with measures including salary cuts for public workers and pension freezes.

The government is expected to see its proposals approved with a narrow majority, but voting will be tight since the Basque Nationalists said yesterday they will side with the main opposition Popular Party and oppose the cuts.

Spain's Socialist government's 169 seats do not give it an absolute majority in Spain's 350 seat lower house so it needs support or abstentions from opposition parties to pass measures.

It is expected that Catalan centre-right CiU nationalist party's ten members will abstain, allowing the government to narrowly pass the measures despite widespread opposition.

The austerity plan had been introduced through a decree, meaning it has already gone on to the statute books.

The government's plan aims to save an additional €15 billion and includes wage cuts of 5 per cent for civil servants this year. It aims to cut the budget deficit to 9.3 per cent of gross domestic product this year and then to 6 per cent in 2011, down from 11.2 per cent last year.