Catalonia to cut public sector wages next year

Regional premier urges civil servants to ready themselves for sacrifices

AGENCIES Madrid 22 NOV 2011 - 20:49 CET

Catalonia is to cut public sector wages and increase taxes to reap savings of one billion euros next year as it struggles to tame its deficit, regional premier Arturo Mas said Tuesday.

Mas urged civil servants at all levels to gear themselves for sacrifices, adding that higher tax revenues would come from levies on fuel, water and transport. The measures are to be included in the regional budget for next year, which is expected to be approved in February.

He insisted social services would be spared the ax, although cuts in education and healthcare budgets this year have sparked widespread street protests.

The government has set the regions a combined target of reducing their public deficit to 1.3 percent of GDP this year as part of the country's effort to reduce the combined shortfall of all administrations to 6 percent from 9.2 percent last year. Catalonia, which represents about a fifth of GDP, is expected to miss the target. Fitch Ratings said Tuesday the regions represent the biggest risk to the target.

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