Spains’ new government committed to ‘fiscal rigour’

DAVOS, Switzerland: Spain's Socialist Prime Minister Pedro Sanchez said Wednesday his new coalition government with anti-austerity party Podemos, which has already raised pensions and public sector wages, was committed to "fiscal rigour".

"We will at all times exercise fiscal rigour and sound management of our public accounts," he said in an address to global business leaders and investors at the Davos economic summit in Switzerland.

"We maintain our commitment to reduce the deficit and public debt levels, which will undoubtedly generate greater confidence among economic agents and enable us to have a government with greater possibilities for action and future investment," he added.

Sanchez was sworn in as prime minister for another term on January 8, this time at the helm of a minority coalition government with Podemos. It is Spain's first coalition government since the 1930s. His new government's first measure was to raise pensions this year by 0.9 percent, in line with inflation.

Earlier this week the government approved a 2.0 percent increase in public sector wages. The coalition agreement signed between the two parties also calls for the monthly minimum wage, which rose by 22 percent last year, to be increased further, and for income taxes on those earning more than 130,000 euros ($144,000) per year to be raised.