Spanish politicians accept pay cut

Politicians in both chambers of Spain’s Parliament today agreed to a 10% pay cut as part of efforts to reduce an oversized deficit.

The salary of a member of the lower chamber, or Congress of Deputies, is about €70,000 a year, including housing allowances.

They will join civil servants in central government ministries in receiving less pay – the cuts there average 5% – as Spain struggles to reduce a deficit equivalent to 11.2% of GDP last year, far above the EU limit of 3%.

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

Meanwhile, amid an uproar from local governments, the central government moved to correct a clause in a decree spelling out €15bn in spending cuts approved last week. 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 only 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.

Over the course of the economic crisis, Prime Minister Jose Luis Rodriguez Zapatero has announced reforms on issues such retirement ages and how to calculate pensions, or taxes on the wealthy, only to withdraw them in a matter of days or even hours.