Factbox: Spain's 2013 budget and economic reforms

MADRID (Reuters) - Spain announced a timetable for economic reforms and a tough 2013 budget based mostly on spending cuts on Thursday in what many see as an effort to pre-empt the likely conditions of an international bailout.

BUDGET

Central government spending will be cut by 7.3 percent while revenues are forecast to increase by 4 percent, including a 14.6 percent increase in consumer tax revenues.

TAXES

Several tax breaks for companies will be removed.

New levies on energy will be created to promote the use of green energies.

A tax break on properties, a new levy on lottery gains, a new tax on short-term capital profits and a wealth tax will raise an estimated 1.7 billion euros.

SPENDING

Overall spending at government ministries will be cut by 8.9 percent, including a 25.4 percent cut at the agriculture ministry, 21.3 percent at the industry and energy ministry and 17.2 percent at the education ministry.

The government has pledged to keep unemployment benefit spending under control but did not give any further detail.

Wages of civil servants will be frozen for the third year in a row. Civil servants who retire will not be replaced except for one in 10 positions in key areas such as hospitals and schools.

The cost of servicing the public debt will increase by 9.7 billion euros or 33.8 percent in 2013 to 38.6 billion euros.

PENSIONS

Pension spending will increase by 4.9 percent, including a 1 percent rise in monthly pension payments. Government officials declined to say whether the government would eliminate inflation adjustments for pensions.

The government will present a new law by year-end to restrict early retirement.

Another law will also be put forward to make sure the pension system remains sustainable by changing parameters such as life expectancy.

The government also announced it would tap 3 billion euros from a 69 billion euro social security reserve fun to pay pensions in 2012.

REFORMS

An independent fiscal authority will be created in the first quarter of 2013 to oversee budget drafts and execution. This responds to a demand from the European Commission.

A series of structural reforms will be implemented in the next six months, including liberalizing further the energy, telecom and services sectors.

(Reporting by Julien Toyer; Editing by Fiona Ortiz)

Source: http://news.yahoo.com/factbox-spains-2013-budget-economic-reforms-192657946--business.html

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