The Spanish government is to unveil an economic stimulus package aimed at tackling rising unemployment in the country. The plans of Prime Minister Jose Luis Rodriguez Zapatero are likely to include measures to support the country’s struggling auto industry.

However, Zapatero warned that any plan for the auto industry would have to fit in with European Union initiatives.

“We will make efforts up to where we can legally,” said Zapatero. But he added that Spain could not act “outside the lines marked by the European Union.”

Spanish auto production fell some 26% in October on the same month last year to 206,919 vehicles.

In a statement, the Spanish auto manufacturers association ANFAC said: “The abrupt drop in production in October is explained by the slowdown in European markets which have posted six consecutive months of decline and by the bad situation of the Spanish market.”

Exports from Spain fell 20% in the month, whilst domestic sales fell 40%.

ANFAC estimates that Spanish plants will produce 300,000 fewer vehicles this year compared to 2007, a fall of 10.3%.