Spanish prime minister Jose Luis Rodriguez Zapatero today urged lawmakers to back pension reforms and other austerity measures to lift Spain out of its economic crisis amid opposition to tough spending cuts.
Opening the annual state of the nation debate in parliament, he said the government must hold to its path of austerity in the 2011 budget, even if this hurts economic growth next year.
The large opposition conservative Popular Party (PP) and the Catalan nationalist party CiU have said they will oppose the 2011 budget, but analysts expect Mr Zapatero's minority Socialist government to squeeze it through parliament in the autumn with the backing of small regional parties.
"Additional adjustments and a new restrictive budget for 2011 could affect the speed of the economic recovery," Mr Zapatero said, reiterating forecasts that the economy will shrink in 2010 compared with 2009 but that quarter-on-quarter growth will show Spain has emerged from recession.
Investors have punished Spanish bonds in recent months, concerned about the sluggish economy and a deficit which soared to 11.2 per cent of gross domestic product at the end of 2009.
Mr Zapatero has pushed through a labour market reform, a restructuring of the banking sector and austerity measures to try to restore confidence on the financial markets, and aims to cut the deficit to 3 percent of GDP by 2013.
But with one in five Spanish workers unemployed, Mr Zapatero's popularity has plummeted in his second term in office, to 26 per cent. He is expected to hang on to power until 2012 elections, even though the PP has a 10-point lead in opinion polls, because the opposition is reluctant to force an early election and take power in such difficult times.
Lawmakers from almost every other party strongly criticised Mr Zapatero's speech in parliament, the opening volley in a debate that is expected to extend into the early hours tomorrow.
"It's as though he just stepped off a space ship and arrived in a country where he had just won elections and didn't have five million unemployed people. . . . He's like a knocked-out boxer," PP deputy Celia Villalobos told Reuters.
Reuters