(Bloomberg) -- The Spanish government presented its 2018 budget to parliament, starting a countdown for Prime Minister Mariano Rajoy to win support for his spending plan as fallout from Catalonia's independence crisis threatens his ability to govern.
“The budget favors economic growth and job creation,” Budget Minister Cristobal Montoro said at a news conference Tuesday. “The government seeks the support of other groups.”
Rajoy's cabinet last week approved the budget, which includes increased pensions and payments for civil servants and families in a package designed to shore up his minority government in a bid to see out a term that runs through 2020. The challenge is to negotiate support from Basque nationalists who are withholding their backing amid anger over a legal crackdown on the independence movement in Catalonia.
While the liberals of Ciudadanos have said they will vote in favor, Rajoy's strategy also needs five votes from the Basque nationalists to pass the bill. In a gesture to the Basques, the budget includes proposals to more than double transfers to the region to 337 million euros.
The government is presenting its budget as judges in Germany consider Spain's request to extradite Carles Puigdemont, the former Catalan president, to face charges of rebellion. Puigdemont is being held in jail after being detained by German highway police on March 25.
Rajoy's budget plan includes increased payments for millions of pensioners and widows and reduced taxes for workers on lower incomes. It's based on forecasts that the economy will grow 2.7 percent this year, up from a previous estimate of 2.3 percent given in October, and that unemployment will fall to 15 percent as sustained growth creates about 500,000 jobs.
--With assistance from Kevin Costelloe
To contact the reporters on this story: Maria Tadeo in Madrid at mtadeo@bloomberg.net, Esteban Duarte in Madrid at eduarterubia@bloomberg.net.
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Charles Penty, Ben Sills
©2018 Bloomberg L.P.
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