Spanish senators open debate to confirm deficit cap

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Spanish senators opened a debate Wednesday to give final approval to a hotly protested constitutional reform capping future budget deficits.

The reform is expected to easily garner the three-fifths support required in the Senate after cruising through the lower house with backing from the ruling Socialist Party and main opposition conservative Popular Party.

Smaller parties are mostly opposed, calling for a referendum on the change to the constitution -- only the second since it came into force in 1978 three years after the death of General Francisco Franco.

Under the constitutional change, Spain must stick to a long-term deficit cap except in natural disasters, recessions, or extraordinary emergencies and even then only with approval of the lower house of parliament.

An accompanying law to be enacted by June 30 next year would set the actual limit for the structural deficit at 0.4 percent of annual gross domestic product from 2020.

The reform also obliges Spain to reduce its total accumulated debt to within the European Union-agreed limit of 60 percent of GDP.

On the eve of the vote, thousands of people joined a union protest in Madrid, Barcelona and other major cities demanding the reform be put to a referendum.

© 2011 AFP

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