ISSN 2330-717X

Spain To Enshrine ‘Golden Rule’ In Constitution Guaranteeing Budgetary Stability

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Spain has become the first EU country to follow the advice of Germany and France and start a parliamentary procedure to enshrine in its constitution a ‘golden rule’ guaranteeing budgetary stability, EurActiv Spain reports.

A plenary session of both chambers of the Spanish Parliament yesterday (30 August) approved amid 318 votes in favour, 16 against and two abstentions a proposed amendment to Article 135 of the country’s constitution, designed to set limits to public spending.

Spain
Spain

The motion was made possible on the basis of a rare agreement between the governing Socialists and the opposition People’s Party – affiliated to the European People’s Party – less then three months before snap elections recently called by Prime Minister José Luis Rodríguez Zapatero.

However, all the political parties representing the country’s minorities opposed the move, with the exception of Unión del Pueblo Navarro, which supported the measure, Catalonia’s Convergència i Unió, which did not participate in the vote, and Coalición Canaria, which abstained.

Partido Nacionalista Vasco, Esquerra Republicana de Catalunya, Iniciativa per Catalunya Verds, Bloque Nacionalista Galego, Nafarroa Bai y Unión and Progreso y Democracia all voted against the motion, along with the leftist Izquierda Unida. Some of these parties called for the measure to be submitted to a popular referendum.

The parliamentary groups have only 48 hours after the vote to introduce amendments, which will be subject to debate in another plenary session on 2 September. The final text requires a majority of three-fifths in the lower chamber (Congress) before being sent to the Senate, where a vote is due on 7 September.

German Chancellor Angela Merkel welcomed the parliamentary decision and urged other members of the 17-country currency bloc to follow suit.

“Spain today has defined the debt limit in its legislation, in its constitution, and many countries should follow this path and should tackle the problem at its roots,” Merkel is quoted by Reuters as saying during a state visit to Slovenia.

“All members of the EU and Europe as a whole must improve their competitiveness and through strict budget discipline ensure a solid and sustainable financing of their public budgets according to the conditions of the reformed Stability and Growth Pact,” she added.

A European Commission spokesperson also welcomed the Spanish parliament’s move.

Amadeu Altafaj, spokesperson for Economic and Monetary Affairs Commissioner Olli Rehn, said the motion was “positive” and “aimed at strengthening confidence” in the euro zone.

Spain has undertaken unpopular austerity measures aimed at cutting a budget deficit which soared to 11.1% of GDP in 2009 back to a eurozone limit of 3% by 2013.

Meanwhile, investors have focused on the interest rates Spain needs to pay lenders in an attempt to ascertain whether it can afford to keep financing its deficit. According to Reuters, if interest rates were to rise too high, Spain may need a bail-out like those received by Greece, Ireland and Portugal.

Original article

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