March 14, 2018 / 2:04 PM / 9 months ago

Spain's PM offers lawmakers pensions deal to pass 2018 budget

MADRID (Reuters) - Spain’s Prime Minister Mariano Rajoy said on Wednesday the government would increase some state pensions if opposition parties supported his minority government’s budget proposal for 2018 in parliament.

Spain's Prime Minister Mariano Rajoy adjusts his glasses before delivering his speech during a debate about state pensions at Parliament in Madrid, Spain, March 14, 2018. REUTERS/Sergio Perez

The amended draft will be submitted to parliament before the end of March, after the government delayed a previous proposal due to lack of support at the height of a political crisis triggered by an independence drive in Catalonia.

Rajoy told parliament the new document would include tax breaks for surviving spouses claiming pensions and those on minimum state pensions, which stand at around 640 euros a month.

“It is within the framework ... (of the 2018 budget, though) taking into account that we can’t spend more than we earn,” Rajoy told lawmakers, without giving further details.

Retirees’ groups plan to hold marches across the country on Saturday to protest sliding purchasing power for those on state pensions.

Older people form a large part of the voter base of Rajoy’s conservative People’s Party (PP).

But support for the party has waned over a series of corruption cases, austerity-focused economic policies and what critics viewed as a heavy-handed response to the Catalan crisis, when Madrid took control of the region in October.

In its second term, Rajoy’s government has cut an over-11 percent public deficit to within the EU guidelines of under 3 percent.

It has raised pensions by just 0.25 percent this year, below inflation that stood at 1.1 percent in February.

While the next national election is not due until 2020, polls have shown support for the relatively new, market-friendly Ciudadanos party surge and, in some cases, overtake the PP.

Reporting by Blanca Rodriguez; Writing by Paul Day; editing by John Stonestreet

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