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By Paul Day

MADRID
SPAIN'S government will present an austerity plan by the end of January to help cut the public deficit to 3 percent of gross domestic product by 2013, Prime Minister Jose Luis Rodriguez Zapatero said yesterday.

Spain's public deficit is expected to reach 9.5 percent of GDP this year and the European Commission has given the government three years to bring it back in line with the bloc's deficit ceiling. “We must fix the deficit and we will fix the deficit, and we will meet our commitment of 3 percent by 2013 as the market and the Commission has asked,” Zapatero said. “We need policies of moderation ... but public spending is very decentralised and all the regional governments must take part in any austerity plan. “The government will be the first with a very demanding plan. Regional governments must follow.” Zapatero, whose government yesterday said it had approved a 1.5 percent rise in the minimum wage for next year, declined to give details of the plan and said the government must first sit down with the opposition to hammer out a joint agreement.