Britannia Radio

Spain Plans to Privatize Airports

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By SANTIAGO PEREZ And PABLO DOMINGUEZ

MADRID—The Spanish government plans to privatize the country's top two airports, as part of an effort to cut down on debt by raising an estimated €14 billion ($18.17 billion) from asset sales next year, Prime Minister José Luis Rodríguez Zapatero said Wednesday.

Mr. Zapatero told legislators in Parliament that Madrid's Barajas and Barcelona's El Prat airports will be run by private operators under a 40-year license system. Both airports have been recently remodeled and expanded to absorb increased passenger traffic in coming years.

The measures announced by Mr. Zapatero also seek to foster private investment after Spain's timid economic recovery stalled in the third quarter, as government austerity measures, high unemployment and weakening exports weighed on output.

The government is also stepping up efforts to rebuild market confidence after Spain's risk premium—as measured by the spread of Spain's 10-year bond over the German equivalent—hit record highs, raising financing costs as a bailout for Ireland flared up market concerns about the fiscal soundness of peripheral euro zone members.

Mr. Zapatero said the country's airport operator AENA will also allow private companies to take up to a 49% stake, above initial plans to sell a 30% stake. The government is also planning to sell 30% of Spain's state-owned lottery company, the prime minister added.

Senior government officials said the government plans to raise some €9 billion from the airport assets and another €5 billion from the lottery company stake.

The prime minister also told Parliament that his government plans to lower spending next year by cancelling some extraordinary unemployment benefits, such as the €420 monthly subsidy for people whose jobless benefits had already expired. That program will cease February.