Spain Business
Spanish Government to inject ten billion Euro into the economy
By h.b.
Apr 14, 2008 - 7:18 AM

The Government has announced that the cabinet will approve a cash injection into the Spanish economy of 10 billion €. It will be the first job of the new cabinet, and the package has been put together by the Minister for the Economy, Pedro Solbes.

Part of the plan is the election promise to give a 400 € income tax rebate to all workers, pensioners and the self-employed, who pay income tax. The first half of that payment, a 200 € credit for the first half of the year, will be added to workers wage statements in their July wages. That will cost the Government some 6 billion of the total spend.

The rest of the funding will go on the financing of small and medium businesses which will also see VAT refunds speeded up, and there will be more backing for those who want to buy protección official assisted housing. Families who are having difficulty meeting their mortgage payments will also be able to extend their policies at no extra cost.

Pedro Solbes gave the 10 billion € figure at a meeting of the World Bank over the weekend, and said it was possible thanks to the reduction in the Spanish public debt over recent years.

The Prime Minister, José Luis Rodríguez Zapatero, has meanwhile also promised a package of measures to help the construction industry, with public works being brought forward and a program for the rehabilitation of old buildings.

Still to be finalised however is the Prime Minister’s first meeting of the new legislature with the leader of the Partido Popular opposition, Mariano Rajoy. Both sides have talked about agreeing pacts on policy in many areas, including the fight against terrorism and the reform of the judiciary.