Spain's governing Socialists won approval for a €15 billion austerity package by just one vote today, avoiding a defeat that would have rattled markets and potentially brought down the government.
The bill was approved by 169 votes in favour to 168 against, after the opposition Popular Party voted against, even making sure one of its deputies was brought to the session in an ambulance.
If the bill had been be defeated, the government's plans to get its budget deficit under control would have been thrown into disarray, potentially dismaying credit markets by raising concerns the euro zone's fourth largest economy was fiscally unsustainable.
Spanish commentators said it was difficult to imagine how Prime Minister Jose Luis Rodriguez Zapatero would have been able to stay in government had he lost the vote, which would have sent shockwaves through markets terrified that the Greek crisis will engulf the much larger Spanish economy.
The government's plan aims to save an additional €15 billion and includes wage cuts of 5% for civil servants this year and sharp reductions in public investment plans. It aims to cut the budget deficit to 9.3% of gross domestic product this year and then to 6% in 2011, down from 11.2% last year.
