SPAIN’S controversial austerity bill has been approved – by just one vote.

In a knife-edge decision, 169 voted in favour of the 15bn-euro package with 168 in opposition.

PM Jose Luis Zapatero unveiled the drastic plans last month to counteract fears Spain was heading for a Greek-style economic crisis.

The proposal – which include wage cuts of five per cent for civil servants and huge public investment cuts – had been met with widespread criticism.

Trade unions have already announced a one-day strike due to take place on June 8 to protest against the projected wage cuts.

A parliamentary defeat for Zapatero would have been an extremely damaging blow for his Socialist government.

“The result is calming for the markets because a vote against would have been very worrying,” said Jose Luis Martinez, a strategist at Citigroup.

“But the small margin is worrying considering what Spain is facing.”

It is hoped the bill will reduce the country’s 11 per cent GDP deficit to six per cent by 2011.

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