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Spain waves off austerity with compromise budget

Friday, March 31, 2017 - 01:15

Spain's minority government unveiled a pay rise for public workers and more spending on social measures in a delayed draft budget for 2017 on Friday, steering further away from years of austerity as it tries to win opposition support for the bill. Rosanna Philpott reports.

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Spain's 2017 draft budget several months late, and long awaited it's a fork in the road for Spain's path of austerity. And a big test for Prime Minister Mariano Rajoy Who's had to do some serious compromising... (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "In terms of confidence in Mr Rajoy's ability to hold a government together, it's definitely a good thing, and the fact that he was able to get the budget under EU guidelines, 4.6 per cent last year. Again, Spain is recovering nicely, albeit from a very low base." The draft goes against Rajoy's previous instinct to meet EU deficit targets' serious cuts at home. Now that Spain's economy is on the up - and largely because he didn't have a choice - he's betting on more growth rather than less spending. Hung elections in december 2015 and June 2016 effectively left the country with no government for the majority of last year. Before now most analysts thought Rajoy would struggle to see out his full 4 year term successfully passing through this budget is a sure sign of changing fortunes in that department.

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Spain waves off austerity with compromise budget

Friday, March 31, 2017 - 01:15