Spanish gov't passes 2016 general state budget

The Spanish government on Friday passed the 2016 general state budget which plans to reduce Spain's public deficit to 2.8 percent.

Spain's Prime Minister Mariano Rajoy said Spain would spend less "thanks to the savings arising from the country's economic growth," while saying that the deficit is a big problem for Spain.

However, the improvement in the economy would allow Spain to achieve a balance.

Rajoy highlighted the amount of money dedicated to social expenditure that will account for 53.5 percent of the total. He said 39 euros (43 U.S. dollars) out of 100 will be addressed to pensioners, 7 to unemployment, 8 to other social expenditures, 14 for Spanish regions and 10 to pay debt interest.

According to Rajoy, Spain has already dealt with the most difficult parts of the crisis and assured that this general state budget closed "a very difficult period" and opened a new period of sustainable growth and job creation.

Rajoy said pensions will increase by 0.25 percent in 2016, the minimum increase included in the last reform carried out by the government.

The reform aimed at ensuring sustainability of the system and entailed that pensions would increase by a minimum of 0.25 percent in times of economic difficulties and by 0.5 percent plus the consumer price index (CPI) in times of economic boom.

On the other hand, Rajoy confirmed that salaries of civil servants will increase by 1 percent after six years of stagnation in which trade unions calculated a 20 percent loss on their purchasing power. Furthermore, they will get the Christmas bonus back that had been removed in 2012.

Rajoy said Spain was better nowadays than a year ago and than when his party won the elections by the end of 2011. "We are aware of the progresses made, but we are also aware of the fact that some people have not seen the recovery yet," he said.

Spain will hold general elections this year, although Rajoy did not reveal the exact date. (1 euro = 1.1 U.S. dollars) Endit