REUTERS REPORT

MADRID
THE family of every child born in Spain will get 2'500 euros to help raise the country's low birth rate and support the fast growing economy, Prime Minister Jose Luis Rodriguez Zapatero said yesterday.

The baby bonus follows similar moves in Scandinavia and France to encourage larger families and counteract a trend towards ageing populations that places a burden on pension and social security systems. “To keep progressing, Spain needs more families with more children and families need more support to have these children,” Zapatero told Spain's Congress in his state of the nation address.

Spain's birth rate rose to 1.37 per woman of child bearing age in 2006, its highest rate since 1991, but is still among the lowest levels in Europe.
The rate would be far lower if it were not for the arrival of nearly four million mainly Latin American and North African immigrants since 2000 who tend to have larger families.

The new child payment to families resident in Spain met criticism from Spain's conservative opposition who saw it as a populist measure to win support less than a year before Zapatero faces reelection in March 2008.

Leftist legislators praised the move but said financial support for children was still way below that in other large euro zone economies like Germany.
As in other European countries, Spain's low birth rate and ageing population means it may face problems meeting future pension needs.
Its population has increased by 10 percent since 2000 to 45.1 million, one of the highest rates in Europe, based on immigration rather than births.
Zapatero's Socialist government has used strong economic growth to boost social security reserves and forecast Spain's gross domestic product would continue to expand at a rate over 3.5 percent.

Based on strong growth, the government will add another 4.3 billion euros to the fund in August to take its total to 44.665 billion euros, or 4.15 percent of gross domestic product, Zapatero said.

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