Spain: Stress Fiscal Restraint
Spain's Government and Opposition Agree on Budget Restraint Bill

A balanced budget constitutional amendment is on its way to passage in Spain. The unions are displeased.

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Aryeh ben Hayim,

Jose Zapatero
Jose Zapatero

The lower house of the Spanish Cortes overwhelmingly passed a constitutional amendment on the first reading that would guarantee the "principle of budget stability". The tally was 318 in favor, 16 against and two abstentions.

Germany already has such a provision; the French government is trying to pass a similar provision but faces opposition. The final vote takes place on Sept. 2, after  lawmakers have two days to propose changes to the amendment.

The measure is backed by Prime Minister Jose Luis Rodriguez Zapatero and the opposition People's Party.

Opposed to the plan are the unions and members of Zapatero's Socialist Party. This anger may depress turnout for the party in the general election that is three months away.  

Spain hopes that the measure will convince the financial markets  to stop driving up interest on Spanish debt. Moody's, the rating agency, has already declared its positive impression and said that it would influence its ratings in a positive vein.