Spain’s two main parties agree on a constitutional amendment without the explicit support from other parties

The governing Spanish Socialist Party (PSOE) and the main opposition party, the People’s Party (PP) agree to amend the Spanish Constitution to limit the deficit from public administrations. Other parties have offered to support the amendment but have not participated in the actual writing of the text. The constitutional amendment will not set a deficit figure, which will be set through a law to be approved before July 2012. The PSOE and the PP have agreed that the deficit should be limited at 0.4%: 0.26% corresponding to the State and 0.14% to the Autonomous Communities. Other parties are insisting on the need for a binding referendum.

CNA / Gaspar Pericay Coll

August 26, 2011 10:51 PM

Barcelona (ACN).- Spain will limit public administrations deficit in its Constitution if events continue as expected. Spain’s two main parties, the Spanish Socialist Party (PSOE) –which runs the Government– and the main opposition force, the People’s Party (PP) reached an agreement during Thursday night and registered a constitutional amendment this Friday morning at the Spanish Parliament. The PSOE and the PP have agreed upon a global deficit for all the administrations limited at 0.4% of the GDP from 2020 onwards. However, this figure would not be included in the Constitution and would be set through an organic law to be approved before the end of June 2012. In addition, this 0.4% limit would be split for the three types of public administrations in Spain: local governments would not be allowed to have deficit, Autonomous Communities’ budgets would be allowed to a maximum deficit of 0.14% and the State numbers a deficit of 0.26%. The State is responsible for about half of public spending in the country, Autonomous Communities around 40% as average (although some communities such as Catalonia have more devolved powers and greater spending share) and local governments for the rest. Not including a specific figure in the amendment is seen as a way to bring other parties on board with the agreement reached by the PSOE and the PP. Adding other political forces is particularly important considering that the Spanish Constitution was approved with a wide consensus and its reform should thus respect this spirit. Catalan parties are on guard, as they fear that Catalonia’s fiscal autonomy –which is already quite limited– would be reduced. Currently, some will accept the amendment if certain conditions are included and others remain against it. Catalonia’s two main parties, the Centre-Right Catalan Nationalist Party ‘Convergència i Unió’ (CiU) –which runs the Catalan Government– and the Catalan Socialist Party (PSC), would vote for the amendment under certain conditions. The CiU is more vocal and clear, and the PSC, which is part of the PSOE, feels obliged to support the initiative without criticising it explicitly. The Catalan branch of the People’s Party (PPC) fully supports what their party leadership in Madrid have agreed on.

Josep Antoni Duran i Lleida, the CiU’s Spokesperson at the Spanish Parliament’s, announced that CiU could support the amendment under three conditions: not setting a figure on the Constitution, guaranteeing the Autonomous Communities’ fiscal autonomy and approving the amendment through a referendum. In the last hours, Duran has been insisting on the need to call for a referendum and he has criticised the urgent way through which certain parties want this amendment to be approved.

Other Catalan parties have criticised the amendment and the procedure. Since they assume that a deficit limit will be included in the Constitution, they now insist on the need to call for a binding referendum. This is the stance of the Catalan Eco Socialist Party (ICV-EUiA) and the Catalan Independence Party (ERC).