Debt-hit Spain to raise wages

Spanish Prime Minister Jose Luis Rodriguez Zapatero announced a hike in the minimum wage and in pensions for 2011 in a bid to help those worst affected by the country's economic crisis.

He said the minimum wage will rise by 1.3pc and pensions by an average of 2.3pc.

He said 2011 "should be a year in which we go from recession to recovery". He also predicted the country would see "positive growth" in the fourth quarter.

The Spanish economy, which is the EU's fifth largest, slumped into recession during the second-half of 2008 due to the collapse of a property bubble. It emerged with tepid growth of just 0.1pc in the first quarter and 0.2pc in the second, but then stalled with zero percent growth in the third.