Spain passes spending package with last-minute Basque support

Spanish prime minister Pedro Sánchez pushed through a large economic spending package to shield people from spiralling prices with a last-minute save after key allies threatened to derail it in parliament.

The government Bill was passed by two votes after a far-left nationalist Basque party offered its 11th-hour support to the government on Thursday.

The approval overcame a threat by the largest Catalan secessionist party, a key government ally called ERC, which said it would torpedo the draft law following media reports that the government had used spying software to monitor pro-independence leaders. The government failed earlier in the week to satisfy ERC and others with its offers to investigate and insistence that no laws were broken.

The vote underscored the fragility of Mr Sánchez’s ruling coalition, which needs to frequently rely on a panoply of minor parties, including ERC, to pass legislation. It also underlines his struggles to deal with a battered economy after inflation hit 10 per cent last month, the highest rate Spain has seen for 37 years.

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The package, announced in late March with a price tag of about €16 billion, included tax cuts, a 20-cent discount on every litre of fuel and caps on housing rent. Tension over the legislation led Mr Sánchez to cancel a trip to Moldova and Poland, planned to start on Thursday.

His government has struggled to push its measures through the fractious assembly this year. In February, it managed to pass a key labour reform law by a single vote and only after a member of the main opposition party made a mistake in casting his ballot. – Bloomberg