|(Victor R. Caivano/Associated Press)|
Spain approves austerity measures
MADRID — The Spanish government approved austerity measures and a limited economic stimulus package yesterday to ease investor fears about its debt — and insisted again it was taking strong steps to right its ailing economy.
Markets responded positively after weeks of turmoil, but the country was thrown into chaos again after air traffic controllers unexpectedly staged a massive sick-out just hours after the government approved a measure to partially privatize key airports.
At least 200,000 travelers were stranded on the eve of a long holiday weekend. Prime Minister José Luis Rodríguez Zapatero ordered the military to take over air traffic control, but there was no immediate information when flights would resume.
Zapatero himself canceled a trip to an Iberoamerican summit in Argentina just to preside over the cabinet meeting where plans were also approved to sell off a 30 percent stake in the government-owned national lottery and institute cutbacks to a key jobless benefit, tax cuts for small businesses, and an increase in the tobacco tax.
“We believe we are contributing to the momentum of the country’s economic activity with this reform package,’’ said Economy Minister Elena Salgado. “We are eliminating obstacles and reducing costs.’’
The latest measures, first announced Wednesday by Zapatero, were welcomed by both markets and the European Union after weeks of speculation that Portugal and Spain could follow Greece and Ireland in needing a massive financial bailout.
Spanish and Portuguese stocks recovered yesterday for the third consecutive day, reversing severe losses last week.
But just after the markets closed, Spain was forced to shut down the eight airports and airspace around Madrid because the controllers left their posts or didn’t show up to work.
The head of Spain’s air traffic authority, Juan Ignacio Lema, called the sick-out “intolerable’’ and apologized to Spaniards.