The sale of stakes in state assets like airports will allow Spain to issue less debt than expected next year, according to economy minister Elena Salgado.
In an interview with the Financial Times published today, Ms Salgado said the treasury would need to issue only about €30 to €31 billion of new debt in 2011, compared with the €45 billion originally envisaged.
Spain said yesterday it would sell off stakes in airports and the state-run lottery.
"That will allow us to reduce our stock of debt," she said.
With regards to the recent punishment of Spain's debt by markets in the days following the international bail-out of Ireland, Ms Salgado noted Italy and Belgium as well as Spain and Portugal had been affected by market movements.
"In recent days the attacks of the markets have affected 40 per cent of the euro zone in terms of gross domestic product (GDP)," she said. "When there's a problem that affects 40 per cent of euro zone GDP, it's a systemic problem, it's not a problem of one country or another."
Asked what that problem was, she replied: "A problem of governance - a common currency without a common economic policy."
The premium investors demanded to hold Spanish 10-year bonds over the German equivalent settled at around 262 basis points yesterday, narrowing from a euro-era record high of 307 bps hit on Tuesday.
Spain also said yesterday it would axe a jobless benefit and announced tax cuts for small businesses. These measures would promote economic growth, Ms Salgado said.
Separately, the country's labour ministry today reported the number of registered jobless in Spain rose for the fourth straight month in November, with most lay offs in the highly-seasonal service sector.
Registered jobless rose 0.6 per cent in November, or 24,318 workers, from a month earlier to 4.1 million, with service industries shedding over 15,000 people, while the recession-hit construction and industrial sectors took on new workers.
"This figure confirms that the rate of lay offs is falling, but in conjunction with the social security figures, we believe the unemployment rate will tick back above 20 per cent in the fourth quarter," economist for Cortal Consors Estefania Ponte said.
The labour ministry said the number of workers registered on the social security system dropped 1.3 per cent year-on-year.
The unemployment rate, a quarterly figure calculated through a survey by the National Statistics Institute and considered more accurate than ministry figures, was 19.8 per cent in the third quarter.
Spain has the highest unemployment rate in the European Union, according to Eurostat, more than double the 27-country average, with a burst property bubble and battered consumer confidence putting almost 3 million out of work since 2007.
The jobless increase was the lowest registered in November since 1998, the ministry said.
Reuters