Spain's govt ups social and defense spending in 2023 budget

MADRID (AP) — Spain’s left-wing coalition government on Tuesday unveiled budget plans for 2023 that include increased social and defense spending and raises for civil servants and pensioners.

The government said 6 out of every 10 euros in the proposed budget would go toward social spending. Socialist Prime Minister Pedro Sánchez tweeted that the amount is the most allocated for that purpose in Spain's history.

Sánchez said the deal demonstrated the stability of his Socialists' coalition with the left-wing Unidas Podemos (United We Can). It will be the current government’s final budget before the country's next general election in 2024.

Sánchez tweeted that the coalition government had approved a budget “that protects the middle and working classes, advances social justice and guarantees the economic prosperity of Spain.”

The proposal could undergo changes before receiving parliamentary approval.

The budget includes previously announced tax increases for high earners and breaks for people with lower incomes. It also includes increased benefits for the long-term unemployed and a monthly 100-euro ($99) subsidy for parents with children under age 3.

Presenting the package after the weekly Cabinet meeting, Finance Minister María Jesús Montero told reporters that “the primary objective was to accompany Spanish society to get through the enormous uncertainty provoked by Russia’s war.”

The government proposal would increase spending on primary medical care and mental health by 6.7%, adding another 673 million euros. It would increase spending on education by 7% to 5.4 billion euros.

The government also plans to step up defense spending by 25%, to 12 billion euros, to help Spain reach by 2029 the NATO member goal of devoting 2% of GDP to national defense.

The government plans to adjust pensions in line with inflation, increasing them by 8.5% next year, and to raise the wages of civil servants by 2.5%. Its budget would boost spending on research and development by 23%, to 16 billion euros.

Montero said an emergency measure that provided free commuter train services would remain in place next year instead of expiring in December as previously announced.

Spain’s economy is expected to grow by 4.4% this years and 2.1% in 2023. The country’s unemployment rate, now at 12.5%, has fallen sharply in recent years.