Spain debates budget cap in constitution

30th August 2011, Comments 0 comments

Spanish lawmakers opened debate Tuesday to decide whether to launch an urgent, hotly protested reform of the constitution to cap future budget deficits.

Lower house lawmakers will decide whether to push forward with a fast-track debate on the reform, which is aimed at assuring markets that Spain will pay its debts.

If they agree, the reform could clear the lower house Thursday and go the upper house Senate as soon as next week.

It would be only the second change to the constitution since it was drawn up in 1978, three years after the death of General Francisco Franco.

The ruling Socialist party and main opposition conservative Popular Party bridged bitter rivalry to agree on the proposed reform Friday, an unexpected accord ahead of November 20 general elections.

Under the proposed reform, only the broad principles of a balanced long-term budget are to be enshrined in the constitution.

An accompanying law will set a maximum structural or long-term deficit in the annual budget of 0.4 percent of gross domestic product (GDP) from 2020, a copy of the accord showed.

"We have to take a coherent and forceful decision to strengthen our country's solvency," said the Socialists' parliamentary spokesman Jose Antonio Alonso.

Spain's borrowing costs on the debt markets were too high considering its economic strengths, he said.

"There is no better way to dispel uncertainties than to elevate the principle of budget stability to the level of constitutional mandate so as to consolidate in the world a clear reality: we are a reliable country in the payment of our debts and there should be no doubt about it."

The plan has sparked protests demanding the constitutional change go to a referendum.

Spain's "indignant" protest movement against high unemployment and the handling of the economic crisis plans a rally before parliament Tuesday demanding a referendum.

The country's biggest unions joined with citizens' groups this week to call for protests Wednesday and Thursday across the country and a "major demonstration" in Madrid on September 6.

"We are substituting the sovereignty of citizens with the sovereignty of the markets," Gaspar Llamazares, parliamentary spokesman for the United Left coalition, told lawmakers.

© 2011 AFP

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