MADRID, Aug 14 (AFP): Spain's government yesterday announced a package of reforms aimed at tackling the country's abrupt economic slowdown, including help for families to obtain mortgages amid the property crisis.
The 24 measures were agreed at an emergency meeting of the government's economic affairs committee late Wednesday, and will be approved at a special session of the full cabinet Thursday, the economy ministry said.
Spain's Socialist Prime Minister Jose Luis Rodriguez Zapatero broke off his annual holiday earlier Wednesday to preside over the two meetings on the economy, which is suffering a rapid slowdown after a decade-long boom.
The government last month predicted the economy will grow by just 1.6 per cent in 2008 and 1.0 per cent in 2009 as the boom, based on the property industry, comes to an abrupt halt. It expanded by 3.8 per cent last year.
The government hopes the new measures will bring economic growth up 3.0 per cent by 2010, the ministry said.
The economic affairs committee "gave the green light to an agreement which is set to be approved today (Thursday) by the cabinet, and which includes a programme of 24 reforms" to implemented in 2008 and 2009.
It includes "various measures in strategic sectors," such as housing, transport and energy.
The plan envisages a 20-million-euro (30-million-dollar) cash injection in 2009 and 2010 to help families obtain mortgages as the bubble bursts on the country's once-booming property market, and to aid small and medium sized businesses. It also includes the previously announced elimination of wealth tax.
The government did not indicate if all the measures were new or merely different versions of reforms already promised.
The package is in addition to an 18-billion-euro spending plan announced in April, which includes income tax rebates and funding for public works, aimed at reviving the economy.
"The government wants to send a message of confidence to the people with the conviction that it is taking all measures and combining all efforts to overcome the difficult situation that is affecting the economy of our country," the economy ministry said Wednesday.
"It believes that the country will resolve this crisis and emerge from it in a stronger position."
The economic slowdown has led the unemployment rate to hit 10.44 per cent in the second quarter, its highest level in more than three years, while the yearly inflation rate hit 5.3 per cent in July, its highest level in over a decade.
The conservative opposition has accused Zapatero, who was re-elected to a second term in March, of inaction on the economy.
Zapatero, whose approval ratings have been hurt by the worsening economy, had been on vacation with his family in the Donana national park in southwestern Spain.
