Spain barely approves austerity
The Spanish government passed its proposed austerity budget by just one vote earlier today. Failure to get the vote would have toppled the government and led to serious panic. We should definitely turn our attention to Spain now. It’s not just the Greeks who are outraged by the austerity budgets they are due to experience. The Spanish are objecting too.
The Telegraph reports:
The bill was approved by 169 votes in favour to 168 against, after the opposition Popular Party voted against, even making sure one of its deputies was brought to the session in an ambulance.
It was only saved when 10 deputies from centre-right Catalan nationalists CiU abstained after criticising the bill, saying they did not want Spain to be plunged into a Greek-style crisis.
But CiU said they would not support the 2011 budget bill, Spanish news agencies reported, raising doubts over how Prime Minister Jose Luis Rodriguez Zapatero will be able to continue to steer his country through a time of crisis.
Much of this is clearly political posturing since it was the opposition Partido Popular who conducted the economy and pro-cyclical budgets through the economic boom period. But, the close vote reflects legitimate fears of citizens in a nation with 20% unemployment about the effects of an austerity budget on their economy. These fears have to be exacerbated by a knowledge that every European government is cutting spending as well, which will be a drag on the Spanish economy as well.
Honestly, it is doubtful that these austerity budgets can hold if we see this amount of angst at the outset. Perhaps devaluation can offset some of this. In any event, I will be on BNN at 12:15 PM ET talking about the Eurozone austerity budgets amongst other topics.