Spain to raise taxes, increase infrastructure spending in 2021 budget

The left-wing government was spelling out some of its plans after it had already forecast earlier this month a worse-than-feared contraction of the coronavirus-battered economy this year and a strong rebound in 2021.

"This budget cannot be postponed. This budget is essential for the modernization and recovery of our economy," Prime Minister Pedro Sanchez said in a televised statement.

The tax moves include raising corporate taxes on large companies, income taxes on high earners and increasing a capital gains tax above 200,000 euros.

Sanchez said the government would double the infrastructure budget and would increase civil servants' wages and pensions by 0.9%, in line with projected inflation.

If the minority government gets enough votes to pass it in parliament, it will be Spain's first budget since 2018, and the first full-year budget since 2016. In other years, there was simply a roll-over of the previous budget, for lack of a majority.