Rajoy to raise pensions, cut deficit by 16.5bn euros and move holidays to Mondays

Prime Minister-elect Mariano Rajoy announced yesterday that he will freeze public-sector jobs, move all public holidays to Mondays, stop early retirements and cut the deficit by 16.5 billion euros as part of his grand plan to move Spain out of its deep economic crisis.

These are some of the biggest pledges the Popular Party (PP) leader made for the next four years during his investiture speech, which was delivered to Congress on Monday morning.

The only increase in spending, he said, would be in pensions, which will be brought up to date with the consumer price index from January 1.

The future prime minister, who has kept the plans of his incoming government close to his chest since winning the general elections on November 20, predicted that Spain's exit from the crisis would be guaranteed by the cuts, as well as by fulfilling the country's commitments to Europe. The austerity drive introduced by the outgoing government of José Luis Rodríguez Zapatero involved savings of just 10 billion euros.

"I am willing to hear proposals from everybody but I think that the priorities should be to concentrate on economic growth and job creation," Rajoy said.

Socialist leader Alfredo Pérez Rubalcaba warned that the new PP government would be making drastic cuts in the public welfare system and social policies.

"So when are we going to get the bad news?" Rubalcaba said during the debate. The Socialist leader accused Rajoy of "knowing where the cuts" will be made but declining for now to say where.

Rajoy has made cutting the country's public deficit one of the main pillars of his mandate. He said the country may miss its target of cutting the shortfall to 6 percent of GDP this year from 9.3 percent last year, but insisted the goal of reducing it to 4.4 percent of GDP next year would be met.

In his 84-minute speech to Congress, Rajoy said he would carry out state reforms to avoid duplications, reduce costs and improve efficiency. This will include a freeze on all public-sector jobs except for those in "state security forces and basic public services."

Rajoy also pledged not to raise taxes at the current time. But he said he would reform the manner in which small businesses and the self-employed pay value-added tax (VAT).

In general terms he also said he would carry out an "integral reform to the job market," which would include moving all public holidays to Mondays "except for those with the deepest social roots," and a youth-employment plan.

The conservative leader added that one of the aims of his government would be to define the role of Spain for the next 20 years: "To concentrate efforts on creating employment" and to govern from the point of view "of dialogue and transparency," he said.

Rajoy, who is scheduled to be invested on Wednesday, plans to undertake 12 legal reforms in the first three months of 2012. Rubalcaba said that the Socialists will vote against his investiture but offered to work with the PP and offer a loyal and constructive opposition.

"Even if our vote is a negative one our spirit will be positive," Rubalcaba said.

The Socialists weren't alone in criticizing Rajoy for being vague on his plans.

Josep Antoni Durán Lleida, spokesman for the Catalan nationalist CiU bloc - the third-largest political force in parliament - accused Rajoy of purposely "keeping quiet" about his measures and not releasing too many details.

Rosa Díez, of the Unión Progreso y Democracia, also said that Rajoy's proposed measures are very ambiguous. "He didn't dedicate any time to reflect on the political crisis," she said.

United Left (IU) coalition director Cayo Lara said his group will vote against all the measures Rajoy plans on introducing. Lara began his speech by attacking the outgoing Socialist government of José Luis Rodríguez Zapatero and said he didn't "expect anything different" from the new PP administration.

Alfred Bosch, spokesman for the Catalan Republican Left (ERC) party, said that his group will also vote against Rajoy's investiture.

Rubalcaba also publicly challenged Rajoy and the PP to withdraw the appeal it filed with the Constitutional Court against gay marriage. His demand was met by a round of applause from the opposition parties.