Spanish gov't to freeze minimum wage

MADRID, Dec. 28 (Xinhua) -- The new Spanish government of Prime Minister Mariano Rajoy proposed on Wednesday to freeze the country's current monthly minimum wage of 641.4 euros (838.2 U.S. dollars).

The proposal, which is certain to be accepted by the second cabinet meeting held under Rajoy's government, goes against the wishes of Spain's trade unions.

The major unions Union General de Trabajadores (UGT) and Comisiones Obreras (CC.OO) sent the prime minister a letter before Christmas, demanding a rise of the minimum wage, given that the purchasing power of Spaniards declined by around 3 percent for the country's lowest earners during 2010 and 2011.

Spain's new Minister of Employment Fatima Banez will begin talks with the unions over labor reform. Rajoy's government has set a cutoff date of Jan. 7th for an agreement to be reached.

Friday's cabinet meeting will also see the government confirm its first round of spending cuts with around 4,000 million euros (5,227 million dollars) expected to be chopped from the budget as the first step Rajoy takes to reduce public deficit.

The new Spanish leader has claimed that cuts of around 16,000 million euros (20,909 million dollars) will have to be made if Spain is to bring the reduction of the deficit in line with EU agreements.