What a good idea

Spain is moving to put in place constitutional changes to prevent future governments racking up excessive debt.

Prime Minister Jose Luis Rodriguez Zapatero told parliament that the constitution should be amended with a clause obliging governments to limit public deficits.

Last week, France and Germany proposed that all eurozone countries should introduce balanced budget provisions to help avoid a repeat of the current debt crisis.

Parliament discussed further austerity measures designed to cut the deficit to 6% of economic output this year, from 9.2% in 2010.

The BBC reports the proposed constitutional amendment would require the government to maintain a balanced budget, and would put a cap on the total amount of debts it could run up.

”It represents a step toward strengthening confidence in the medium and long term stability in the Spanish economy,” said Mr Zapatero.

A constitutional amendment needs a 60% majority in both chambers of parliament, and can only pass with opposition support.

It is expected to be passed before elections are held on 20 November.

Opposition leader Mariano Rajoy said his People’s Party intends to back it.

”I think it should have been done already and things would gave gone better for us,” he said.

Something like this is wanted int eh US as well but there is no bi-partisan support for such measures. Perhaps they ned a bit more pain to sway their thinking.

It is certainly something we should look at here as well.

 


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  • Clint Heine

    Didn’t ACT have something like this just come up? Which National will not seriously support? Ah well.

  • Rusty Kane

    The motto .. don’t get it unless you have the money to pay for it .. comes to mind .. but off-course under those principles .. most NZers wouldn’t have their first house or car.

  • thor42

    This is a very good step by Spain!
    Ok, we do have the Fiscal Responsibility Act (1994), but I see this statement on the Treasury’s web-page about it –
    http://www.treasury.govt.nz/publications/research-policy/wp/2001/01-25/04.htm

    “Definitions such as “prudent” level of debt, or “reasonable” degree of predictability are not specified in the Act. It is left to the Government of the day to interpret the relevant fiscal terms.”

    Oh, great. So a pack of complete f**king plonkers like Labour can come in, run up a humungous level of debt, and still claim that they are being “fiscally responsible”. Yeah, right.

    This country needs to have “fiscal responsibility” **precisely specified**, and enshrined as a **requirement of all government budgets**.

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