SPAIN:SPAIN SAID it will partly privatise its lucrative state lottery company and cut jobless benefits in its latest effort to cut public debt and help restore confidence in the economy.
Socialist prime minister José Luis Rodríguez Zapatero announced the plans in parliament yesterday after more than a week of bond-market jitters over “peripheral” euro zone economies, including Ireland.
Mr Zapatero said Spain would sell 30 per cent of the state-run Loterías y Apuestas del Estado, which made €3 billion in net profit last year.
It would also allow Madrid and Barcelona airports to be run by private concessions under a plan to sell 49 per cent of Aeropuertos Españoles y Navegación Aérea (Aena), the state airports authority, to investors.
Mr Zapatero also announced tax cuts for small firms from February, to coincide with the withdrawal of a €426 “last resort” monthly benefit paid to unemployed people who no longer qualify for social security payments after more than two years on the dole.
Senior Spanish officials are privately furious with German chancellor Angela Merkel, blaming her as much as the Irish banking crisis for the latest rush of selling suffered by euro zone sovereign borrowers in the bond markets.
Investors have dumped euro bonds in the light of Germany’s insistence that private sector bondholders should take “haircuts” – discounts on the value of their investments – in the event of future rescues. This has led to increased fears of contagion across Europe, perhaps beyond so-called “peripheral” states to the next tier of countries: Italy, Belgium and France.
Portugal has rejected calls from European officials to liberalise its labour market to strengthen growth, saying it would work to make legislation more effective.
Prime minister José Sócrates said he wanted to “make it easier for the unemployed to find work”, rather than facilitate the dismissal of workers.
Portugal is under pressure from the European Commission and other international bodies to make structural reforms to boost growth and reduce public deficits. – Copyright The Financial Times Limited 2010
