Zapatero gets reform bill ratified

Spanish parliament yesterday ratified reforms aimed at reviving the euro zone's number 4 economy, the main opposition Popular Party abstained.

The ratification vote triggers a process that converts it into a bill which can be debated and amended by lawmakers. Observers said the reforms were a vital step in restoring long-term economic growth by easing the cost of hiring and firing, amongst the most expensive in the developed world, and making Spain's manufacturing industry more competitive.

On May 12 Spanish Socialist Prime Minister Zapatero had  announced fresh spending cuts totalling 15 billion euros in 2010 and 2011. Civil service salaries were cut by 5 percent in 2010 and frozen in 2011, while more than 6 billion euros will be cut from public investment.  The reforms are aimed at speeding up fiscal consolidation and meeting Spain's new deficit targets of 9.3 percent of GDP in 2010 and 6 percent in 2011, compared to 11.2 percent in 2009.  The reform programme was met with national protests from unions and left wing groups. 

Zapatero's reforms follow in the steps of Greece.