Spain tries to head off bailout

Spain
has announced plans to sell off stakes in the country’s airport authority and
national lottery as part of moves to improve public finances.

Companies
will be allowed to take a stake of up to 49 per cent in the Aena airport
authority, the government said.

The
state lottery will also see a 30 per cent stake sold off, and a special payment
for the long-term unemployed is to end.

Spain’s
budget deficit hit 11.1 per cent of GDP last year, and the government has
pledged to cut it to 6 per cent in 2011.

Aena
manages 47 Spanish airports, including Madrid Barajas Airport and Barcelona
Airport, the two largest.

It
also has a 10 per cent stake in London Luton Airport in the UK.

Spain’s
state lottery made a net profit of $3.9 billion in 2009, 3.5 per cent higher
than a year before, despite the country’s economic woes.

The
Spanish government also announced that it would cut taxes for small and
medium-sized companies.

A
European Union spokesman said Brussels welcomed the announcements.

He
added: “They confirm the government’s determination to continue with its
reform agenda.”

In
addition to cutting its public deficit, the Spanish government has to deal with
a 20 per cent unemployment rate – the highest in the European Union.

To
try to reduce this, it is liberalising labour laws to make its job market more
flexible.

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