The Spanish government will announce details of its 2010 budget Bill today, including tax increases and possible spending cuts, officials said amid speculation it could struggle to get Parliamentary approval.

While the Bill's details have not been published, Prime Minister Jose Luis Rodriguez Zapatero has said it will boost the proportion of taxation to gross domestic product by 1.5 percentage points - equivalent to about €15 billion.

Whatever the budget's contents, the government, which is six seats short of a majority in the 350-seat national Parliament, will have a tough time getting the chamber to approve the Bill. With the conservative opposition and Catalan nationalists saying they will vote against tax increases, the Socialists have been courting small left-wing parties.

If the budget were to be rejected by parliament, Spain could face a political crisis.

Local media has quoted politicians from minority parties being courted for budget support by the Socialists as saying the government wants to increase the rate of value added tax from its current level of 16 per cent, which is low by European standards.

The government has to prove to debt markets that it can make progress towards a target of cutting a budget deficit swollen by anti-crisis spending programmes to about 10 per cent of GDP to a target of three per cent by 2012. There is widespread scepticism that this can be achieved, and a former economy minister, Carlos Solchaga, said earlier this week that there was no way the government would be able to raise an additional €15 billion in taxes during a recession.

The government's deficit goal is further complicated by the fact that regional administrations are responsible for much of public spending.