Spain extends car subsidy scheme as part of stimulus package

MADRID, June 6 Fri Jun 6, 2014 9:12am EDT

MADRID, June 6 (Reuters) - Spain has extended its subsidy scheme for new car purchases with a further 175 million euros ($238 million), Deputy Prime Minister Soraya Saenz de Santamaria said on Friday, as part of a larger economic stimulus plan.

New car sales in Spain rose for a ninth straight month in May, largely due to state credits from the PIVE scheme. The extension is the sixth time the programme has been topped up.

Spanish carmakers' association Anfac said the support had allowed it to raise its full-year car sales forecast to 850,000 from 820,000. Top car sellers in the country include Germany's Volkswagen and its Seat brand.

The economic stimulus package, announced by Prime Minister Mariano Rajoy on Saturday, is worth 6.3 billion euros and includes measures to boost Spanish industry, research and development, energy-saving and transport.

"This plan aims to improve competitiveness and promote efficiency as well as make the most of budgetary resources available and eliminate, or reduce to a minimum, any obstacles to growth," Saenz de Santamaria said at the press conference following the weekly cabinet meeting.

Spain's economy emerged from a two year recession in the second half of last year and grew at its fastest quarterly pace in six years January to March, though efforts to reduce a large budget deficit via austerity measures have choked investment.

Saenz de Santamaria gave few details of the stimulus plan which also includes new credit lines from the state credit agency ICO for small and medium-sized companies.

The stimulus package would have no effect on Spain's public debt or deficit, she said.

($1 = 0.7345 Euros) (Reporting by Paul Day; Editing by Mark Potter)

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