Spanish Parliament to vote on labor reforms

MADRID (AP) - Spanish parliamentarians were to vote Tuesday on labor market reforms the government says are crucial to bringing down the country's soaring 20 percent unemployment rate.

The reforms, which ease hiring and firing regulations, are to be approved or rejected in an afternoon session. The main opposition parties are expected to abstain, allowing the Socialist party to get the measures through by a simple majority.

The package follows an austerity plan aimed at slashing a bloated deficit of 11.2 percent of GDP in 2009 to 3 percent by 2013 that lawmakers approved by just one vote last month.

The Socialists have 169 deputies in the 350-seat lower chamber but have seen the support they normally receive from smaller centrist and leftist parties disappear in recent months.

The measures, while sharply criticized as insufficient or counterproductive at home, have been welcomed by the U.S. government, the International Monetary Fund and the European Union.

On Monday, the White House says President Barack Obama talked by telephone with Zapatero on Monday to express his support.

"The president expressed support for the difficult but necessary economic actions that President Zapatero has taken in recent weeks to strengthen Spain's economy," U.S. Deputy Press Secretary Bill Burton said.

"They discussed the importance of continuing to take resolute steps to foster a durable recovery and to strengthen financial regulation, looking ahead to the G20 meeting in Canada," he added.

The measures also are aimed at calming fears among market investors that Spain might be headed for Greece-style bailout.

Europe's fourth largest economy, Spain is struggling to emerge from nearly two years of recession triggered by the collapse of a boom fueled by construction and free-flowing credit.

Its public coffers are now nearly drained by spending to cope with a eurozone-high jobless rate and economic stimulus measures.