Rajoy to seek regional support for tough budget as honeymoon ends

With the three-month period of grace afforded to incoming governments now behind him, Prime Minister Mariano Rajoy says he wants regional parties to back his draft budget, presented last week, which includes the deepest spending cuts of the last three decades along with a controversial amnesty for tax dodgers.

The Catalan regional government, headed by the center-right nationalist CiU group, has backed the draft budget. The Basque nationalist PNV party voted against the labor market reforms.

Rajoy had delayed announcing the budget until after regional elections in Andalusia, and has largely been occupied with labor market reforms during his first 100 days in office. In the meantime, Brussels has grown impatient while the European Central Bank has urged Rajoy to push through the budget via emergency legislation rather than following usual legislative procedures that will take until June.

Socialist opposition leader Alfredo Pérez Rubalcaba described proposals to allow tax dodgers to declare money and pay 10 percent tax on it as a “cushy” deal for wrongdoers.

Speaking at a Socialist Party rally in Valencia, Rubalcaba highlighted what he called the government’s broken promises during its first 100 days in office. “There has been a rapid loss of credibility, because the government hasn’t told the truth. Now the electorate can see that they have raised taxes and made it easier to sack workers.”