Spain increases minimum wage
Spain´s socialist government approved Wednesday a 1.5 percent increase in the national minimum wage to 633.3 euros (911.2 dollars) from 624 euros a month during its last cabinet meeting of the year.
Prime Minister Jose Luis Rodriguez Zapatero promised during the last general election campaign in 2008 to raise the minimum wage to 800 euros by 2012 if his Socialist Party was re-elected for a second term.
Spain, along with Portugal, Greece and the the new members of the European Union in central and eastern Europe has one of the lowest minimum wages in the 27-nation bloc.
In December of last year the government increased the minimum wage for 2009 by 4.0 percent from 600 euros to 624 euros a month.
The government said consumer prices rose this year at a far lower rate than in previous years and a “policy of wage moderation in 2010 to contribute to the economic recovery and create jobs” seemed appropriate.
Last month European Central Bank President Jean-Claude Trichet warned that Spain and other eurozone nations with wide current account imbalances needed to limit wage increases “to regain competitiveness.”
Spain´s unemployment rate has doubled over the past two years to hit 19.3 percent in October, the second highest rate in the EU behind Latvia.
The Spanish economy, Europe´s fifth-largest, entered into recession at the end of 2008 as the international credit crunch hastened a correction which was already under way in its key property sector.
The Bank of Spain forecasts the country will end the year with an annual inflation rate of 0.2 percent.
BBVA, Spain´s second-largest bank, forecasts Spain´s inflation rate will be between 0.5 and 1.0 percent next year.
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