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Spanish minister questions free health care in search for cuts

Luis de Guindos sparked controversy when he mooted the idea on national radio in another reflection of how the country is desperately seeking to scrape new sources of income.

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Wealthier Spaniards should be made to pay for their own health care while poorer people continue to access services for free, the country's economy minister has suggested as the government tries to find new austerity measures.

Luis de Guindos sparked controversy yesterday (Monday) when he mooted the idea on national radio in another reflection of how the country is desperately seeking to scrape new sources of income.

The ruling party quickly dismissed the minister's comments as opinion. However, given Spain's sick public finances, de Guindos said a debate over the future of health care in Spain was vital.

"I believe we have to have a debate between the central government and the autonomous regions and think about whether in the current situation we have to provide all the health services for free to a gentleman who earns more than euros 100,000 [pounds 83,000]," he said on the Cadena SER network. "It is a very important debate in which the future of the quality of health care in Spain is in play."

He said debt-ridden regions in Spain owed medical suppliers billions of pounds and making the rich pay for health care would help reduce overspending. "We have to see if, under the current circumstances, we can maintain a system which generates a structural deficit."

Spaniards have already endured harsh measures to deal with the country's debt crisis, including increasing the retirement age by two years to 67, freezing civil servant wages, raising income, property and sales taxes and changing employment laws to make jobs less secure.

However, the minister's off-the-wall health care proposal, which would generate a further squeeze on Spaniards, came as a major banking group warned that harsh cuts in cash-strapped countries were dragging down the euro area.

The Institute of International Finance (IIF), which represents 450 major finance institutions worldwide, called for more spending by countries such as Germany and said the eurozone firewall - designed to stop market contagion - should be expanded as soon as possible.

IIF chief Charles Dallara, in a letter to the International Monetary Fund and the World Bank ahead of their yearly spring meetings this month, said: "The emphasis so far on fiscal austerity, while to a degree necessary for the countries facing market funding difficulties, is excessive when carried out across the board."

The tighter spending by eurozone governments "has already contributed to a steep contraction in domestic demand in the euro area," Dallara said.

Portuguese bank borrowings from the European Central Bank jumped to a record last month as they took advantage of the cheap money on offer. The banks borrowed euros 56.3bn (pounds 46.5bn) from the ECB, up 18pc month-on-month, according to the Bank of Portugal. The figures will raise further questions over how the banks will wean themselves off ECB loans.

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