Protests urged in Spain over deficit amendment

They also said the government is yielding to market pressures that have sent Spanish borrowing costs higher and raised fears Spain will be the next eurozone nation to need a bailout.

Ramon Gorriz of the Workers Commission union said street protests will take place tomorrow and Thursday around the country with a larger one in Madrid next week. “Once again, it is a matter of an offering a sacrifice on the altar of the markets,” Gorriz said of the government's proposal, speaking a day after anti-austerity demonstrators marched through Madrid.

PP backed
The low deficit amendment is backed by the ruling Socialists and opposition conservative Partido Popular and is expected to be approved Friday in the lower chamber of Parliament then go to the Senate.

There is a sense of urgency because Parliament dissolves September 27 and if the amendment is not passed by then, it would have to wait for the next legislature to take power.

Spain is struggling to recover from nearly two years of recession prompted largely by the collapse of a real estate bubble and a credit-fueled consumer spending spree. The jobless rate is near 21 percent — almost 45 percent for young people — and economic growth remains anemic.

Spanish bond yields — a direct measure of how jittery investors are about a country's debt — soared to record levels early this month, and came back down only after the European Central Bank intervened and bought billions in Spanish bonds on the secondary market.

Rushing
Gorriz said that Prime Minister Jose Luis Rodriguez Zapatero's government is rushing the change through Parliament while much of Spain is still on summer vacation and etching deep into stone the spirit of austerity that came with spending cuts, civil servant wage reductions and pension freezes that Spain approved in May 2010 under pressure from Brussels.

He said if lawmakers pass the amendment, the change should be put to a national referendum.
The amendment enshrines the principle of budgetary discipline into Spain's constitution, but does not specify numbers. These will come in a separate law that is to be passed by June 2012.

The two main parties have agreed the law will stipulate that Spain's deficit cannot be exceed 0.4 percent of GDP but this threshold will not take effect until 2020.