Spanish MPs agree to 10% pay cut

POLITICIANS in both chambers of the Spanish parliament have agreed to cut their salaries by 10 per cent to help reduce the country's deficit.

A spokesman for prime minister Jose Luis Rodriguez Zapatero's ruling Socialist Party announced all parties in the chambers had agreed to this at a meeting yesterday.

The agreement in principle will be voted on tomorrow.

The salary of a member of the lower chamber, or Congress of Deputies, is about 70,000 (60,000) a year including housing allowances for those not from Madrid.

Politicians will now join civil servants in government ministries in receiving less pay as Spain struggles to reduce a deficit equivalent to 11.2 per cent of GDP last year, far above the EU limit of 3 per cent.

Last week, the Spanish government passed austerity measures to cut its deficit.

A nationwide federation of municipal governments also announced pay cuts of as much as 15 per cent for mayors and other local elected officials.

Meanwhile, amid an uproar from local governments, the central government scrambled yesterday to correct a clause in the decree spelling out the 15 billion in spending cuts it approved. The clause, which had not been debated publicly, said local governments were barred immediately from taking on more long-term debt. It was published in the official government gazette on Monday.

Now, that ban will not take effect until January. Finance Minister Elena Salgado attributed the change to an honest mistake in a complex decree. But the conservative opposition Popular Party said it was another example of a government that makes things up as it goes along.