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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2010/12/spain-agrees-2011-austerity-budget.jpg"><img class="alignnone size-full" title="Spain's Parliament passed an austerity budget for 2011, saving embattled Prime Minister Jose Luis Rodriguez Zapatero his job" src="http://londonglossy.com/wp-content/uploads/2010/12/min-spain-agrees-2011-austerity-budget.jpg" alt="Spain's Parliament passed an austerity budget for 2011, saving embattled Prime Minister Jose Luis Rodriguez Zapatero his job"/></a></p>
<p>Spain&#8217;s Parliament passed an austerity budget for 2011 by a razor-thin margin, saving embattled Prime Minister Jose Luis Rodriguez Zapatero his job.</p>
<p>It also gave him a victory in his bid to convince markets that the nation would take control of its finances and avoid a Greek style-bailout.</p>
<p>The lower house of congress passed the budget in a 177-171 vote, approving a spending plan that cuts spending by 8% compared with 2010 and sets funding for government ministries at 2006 levels.</p>
<p>Zapatero got crucial support from smaller regional parties to give him enough votes. He leads a minority government that relies on them to get laws passed, cutting deals in return for the support.</p>
<p>The vote came after ratings agency Moody&#8217;s warned last week it might downgrade Spanish government debt because of grim prospects for economic growth. Spain is struggling to emerge from nearly two years of recession triggered by a burst real estate bubble. Unemployment stands at nearly 20%, and is much higher for young adults.</p>
<p>On Monday, Moody&#8217;s Investor Service also announced it might downgrade the debt of Spanish banks, saying their capitalisation, profitability and access to market funding would remain weak because of Spain&#8217;s sour economy.</p>
<p>Failure to pass a budget would have been unprecedented since Spain returned to democracy in 1975 after the death of dictator Francisco Franco &#8211; and probably would have forced Zapatero to call national elections next year. They are currently scheduled for 2012.</p>
<p>Spain is key to the survival of the eurozone because its economy is the bloc&#8217;s fourth largest, and investors fear a bailout would be too expensive for the zone to handle.</p>
<p>Zapatero insists Spain won&#8217;t need outside help, and his administration released figures today showing that central government&#8217;s deficit through the end of November was down 46% from the same period in 2009.</p>
<p>Finance Minister Elena Salgado insisted that Spain would have no financing troubles next year, aiming to quell market fears.</p>
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