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Budget agreement possible between Zapatero and Basque Nationalists

Fri 15th Oct 2010

Zapatero's socialist government and Basque Country's nationalist PNV party may find an agreement to approve next year's budget later today.

The shadow of recession and worries over its debt have forced Prime Minister Zapatero into making considerable spending cuts whilst attempting to keep his unpopular government in power until the 2012 elections.

The budget will contain 10 billion of the 15 billion euros of spending cuts promised for 2010 & 2011 to convince Spain's creditors it can deal with a massive public deficit.

Due to losing support from the other main leftist parties, Zapatero is having to rely on smaller regional parties for their support to enable the budget to be approved. This has necessitated months of sensitive negotiations, with the Basque nationalist party PNV offering its support, but only in return for more political self-governance and a drive for further reforms.

Concerning the PNV's demands for more autonomy for the Basque Country, Zapatero said he would only consider "any transfer of power that falls within the statutory framework and, furthermore, which influences economic and employment matters".

The PNV hinted at the threat of early elections if the budget is not approved - obviously aware of the strong bargaining position that they are now in. "(Without a budget) it would be inconceivable and irresponsible for the government to try to complete its term" PNV spokesman Josu Erkoreka told Europa Press in a interview.

With Socialist parties and unions having supported last month's general strike, and no support from the Popular Party and Catalan CiU party, the Socialists' need votes from the Basque nationalists (PNV). "We're not going to negotiate over small change" Member of Parliament Inaki Anasagasti told the press, saying he wants further autonomous powers for the Basque regional government. "If you want our support, then let's talk about the Basque constitution. Let's talk about reducing the number of ministries. Let's talk about structural reforms..." he said.

Spain is already one of Europe's most decentralised states, with the central government controlling only about 20 percent of national public spending, while autonomous regions and local councils control about half, making their cooperation essential in any spending decisions.

Anasagasti said he will demand the transfer of powers to the Basque region to be speeded up, closure of at least three unneeded central government ministries, and a reduction in the number of vice-presidencies from three to one.