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£15bn rail scheme boosts Spanish economy

The Spanish Government is attempting to revive its struggling economy with the introduction of a £15bn infrastructure project.

Prime Minister Jose Luis Rodriguez Zapatero said a new freight and passenger rail scheme would be created using 70% of the money, while the other 30% would be allocated to the maintenance and building of highways.

The project will be initially financed by the firms contracted with funds from private bank and state credit institutions. This means the country’s coffers will not be immediately impacted.

Mr Zapatero said Spain would begin paying the companies back after 2014 by means of a new tax on users once the projects were finalised and functioning.

“This is the most important collaboration between the public and private sector in the history of our country,” he said.

The Development Ministry said the plan was designed so that it would not interfere with the government’s pledge to reduce its deficit from 11.2% of GDP to 3% by 2013, as demanded by the European Union.

Spain, with unemployment at an EU high of 18.8%, is desperately searching for ways to create new jobs and boost its economy following the collapse of its construction sector and the effects of the international financial crisis in recent years.

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