Spain's PM will outline austerity measures

Madrid: Spain's next prime minister was to face Parliament yesterday and was expected to outline the painful austerity measures and labour reforms ahead for a country already buckling under a nearly 22 per cent jobless rate and mountains of debt.

Conservative Mariano Rajoy of the Popular Party was to speak to the lower house of the legislature, kicking off debate on swearing him in as premier after his party's landslide win in the November 20 general elections. A yes vote is assured because his party has an absolute majority.

Rajoy has spoken very little since the election, making yesterday's speech keenly awaited in Spain and abroad. Spain's borrowing costs have soared in recent months as investors became increasingly wary of Spanish debt, and any of his statements could affect the markets.

But it was not clear how much detail Rajoy would give on how he plans to meet deficit-reduction goals while trying to keep Spain from slipping into another recession. His party has said much will depend on how bad public finances are when 2011 ends.

Oath of office

After opposition parties speak, Rajoy will be voted in today and take the oath of office tomorrow.

Spanish newspapers reported yesterday that Rajoy might announce measures such as streamlining government by merging several ministries, which could mean layoffs for those without layoff-proof civil servant status, and cuts in infrastructure projects, which would hurt the already moribund construction sector.

Another pressing issue concerns reforms to chip away at Spain's staggering jobless rate, the highest among the 17 nations using the euro, which soars to 45 per cent for people under 25.