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Spain to sell assets to ease fears

Spain is to sell a 30% stake in its national lottery and partially privatise airports in Madrid and Barcelona to ease market worries about public finances.

Prime minister Jose Luis Rodriguez Zapatero made the announcements in parliament after the country suffered at the hands of investors who fear it may need a bailout like those received by Greece and Ireland.

The government will also stop paying 420 euro (£351) per month in February to people whose unemployment benefits have expired.

The government hopes the move will convince investors that Spain is taking strong steps to stabilise the eurozone's fourth largest economy so it will not need outside help.

Madrid's stock index, which had lost nearly 15% in November, jumped 4.5% on the news.

Pressure also eased on Spain's 10-year bonds, with yields at 5.3%, making for a 2.5% difference against the benchmark German 10-year bond.

European Union Competition Commissioner Joaquin Almunia also welcomed the reforms.

"Very positive, they are extremely welcome. They are necessary, show the government's determination and they are in the right direction," he said.

"We have to hope that they will also help to strengthen market confidence in the evolution of the Spanish economy and Spain's public finances," he added.

Mr Zapatero said the measures will allow private investors a 49% stake in Spanish airports. The government hopes to raise 9 billion euro (£7.5 billion) from the operation.

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