June 28, 2018 / 10:41 AM / 19 days ago

Spain passes delayed budget as new government looks to 2019

MADRID (Reuters) - Spain’s parliament on Thursday passed its long-delayed 2018 budget on Thursday, clearing the way for the minority Socialist government to start work on next year’s accounts.

FILE PHOTO: A general view of Spain's Parliament in Madrid, Spain, June 1, 2018. Emilio Naranjo/Pool via REUTERS

Approval of the budget, originally submitted by the previous conservative administration, was postponed last year after its efforts to find allies to support the bill in parliament were undermined by a unilateral independence declaration in the northeastern region of Catalonia.

The budget, the last one drafted by the conservatives after six years in office, aims to bring the public deficit below the European Union ceiling of 3 percent of economic output for the first time since before the 2008 economic crisis.

The EU set Spain a target of 2.2 percent for this year, but concessions to an austerity-weary population means the fiscal shortfall will be closer to 2.7 percent, according to Bank of Spain forecasts.

Work on the 2019 budget will begin almost immediately, with the Socialists, who hold just 84 seats in the 350-seat parliament, proposing hikes in social security contributions to help cover rises in pensions and civil servants’ pay.

Reporting by Paul Day; Editing by Julien Toyer and John Stonestreet

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