Spain approves public wage cuts

Madrid: Spain approved the first public wage cuts since returning to democracy in 1978 and reduced its economic growth forecast for next year as the government tries to tame the euro region’s third-largest budget deficit.

Gross domestic product will grow 1.3% in 2011, less than a previous projection for 1.8%, and the government said the deficit will narrow to 6% of GDP next year from 11.2% in 2009. Wages for government workers will drop 5% in June.