Earlier this week Spain announced that it would add a balanced budget amendment to its constitution, and some of the details are beginning to emerge now.
The Socialists distributed the text of the amendment which indicated that they have until next year to set specific goals for 2020, according to Bloomberg.
The amendment states that public debt can not exceed 60% of GDP, thought exceptions would be made in case of a natural catastrophe, economic recession or other emergencies. The changes will also require the government to stick to EU annual deficit limits of 3% of GDP.
The parties have also agreed to pass another law by June 2012 that would set a maximum deficit of 0.4% of GDP starting 2020. According to this plan, the centre will account for 0.26 percentage points and the 17 autonomous regions 0.14.
The ruling Socialist Party and opposition People’s Party have agreed to amend the constitution so every part of the government would have to abide by the “principle of budget stability”. Analysts however remain sceptical of the plan because it leaves too many loopholes.