Spain says to raise pensions in 2013 despite crisis

Spains government said Tuesday it will raise pensions in 2013 even as it prepares a tight-fisted budget to rein in a yawning public deficit and try to avoid a full-blown bailout.Prime Minister Mariano Rajoy has vowed to protect pensions, a key pre-election promise, despite a broad austerity programme of spending cuts and tax increases.His deputy, Soraya Saenz de Santamaria, recalled that promise in an interview with Cadena Ser radio and said the new level for pensions would be decided in November.Will pensions go up? Yes, pensions are going to go up. Pensions will obviously be adjusted for the cost of living, she said.Spains conservative Popular Party government is to release the 2013 budget on Thursday.Inflation has picked up in past months, and if the government decides to fully compensate for the increase it could cost up to four billion euros in the 2012 accounts, according to Spanish media.Right-leaning daily El Mundo predicted the government would raise pensions by one percent in 2013.The government will carry on with its reform agenda, there is no doubt this will be an austere budget and we ministers willhave to make ends meet to try to do more with less, Saenz de Santamaria said.The minister defended the Spanish governments position of waiting to see the attached conditions before deciding whether to tap eurozone bailout funds and the European Central Bank for a bailout.It is like when you buy a house. You dont decide to buy a house in the same way as you buy a T-shirt. You think carefully about the mortgage, the conditions and this is the same procedure and mentality that the government is taking.