Spanish government to cut pay of public employees

20:29, May 12, 2010      

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Spanish Prime Minister Jose Luis Rodriguez Zapatero announced Wednesday that his government would cut the wages of public employees as part of the effort to reduce the country’s deficit 0.5 percent by the end of the year and a further 1 percent during 2011.

That means reducing public spending by 5,000 million euros in (6,550 million US dollars) this year and twice as much in the following 12 months

The wages of public employees will be cut by 5 percent from June and will be frozen in 2011.

Zapatero announced that the reductions will be proportional to the amount of money that is earned with the highest earners in the public sector being cut more. He also said that his earnings and those of members of his government faced a 15 percent reduction.

The deficit reduction measures also include the freezing of pensions and the end of the ‘cheque-bebe’ which gives a grant of 2,500 euros (3,175 US dollars) for the birth or adoption of a child. The cheque-bebe has been in existence from mid 2007.

"These measures try to be fair in that they aim to spread the national effort that as the President of the Government I am asking us all to make," said Zapatero in the Spanish Parliament.

He admitted that the wage cuts would have a negative effect on his country’s recovery from the economic crisis, adding that the Government’s latest predictions for economic growth, would be "a few tenth of a percent below what was predicted."



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