Madrid - AFP
Spain\'s Senate overwhelmingly passed a fiercely protested constitutional reform Wednesday that will put a cap on future deficits to try to fend off an unfolding eurozone debt crisis. Senators voted 233 to three in favour of the law after a stormy debate, only the second reform to Spain\'s constitution since it came into force in 1978 three years after the death of General Francisco Franco.The measure cruised through the lower chamber last week. It can now only be stopped if 10 percent of either house of parliament backs holding a referendum on it in the next 15 days, which is unlikely considering the size of the \"yes\" vote. The speed of the reform -- it was approved by the Senate just eight days after first being debated in the lower house -- reflects the sense of urgency gripping Spain in the face of the debt crisis.Madrid says it must be approved rapidly for two reasons: to give immediate reassurance to nervous debt markets; and to get through parliament before it is dissolved for November 20 general elections.\"What is at stake is a solution to the crisis, the future of the euro and the maintenance of the welfare state,\" Socialist spokeswoman in the Senate Carmela Silva told the chamber. \"The constitutional amendment will have an impact on the credibility of Spain in the world.\"Spain is only the second country after Germany to approve a \"golden rule\" of budget stability in the constitution. Passage of the reform was assured because both the ruling Socialist and main opposition conservative Popular Party had put aside their differences to jointly propose it. The Popular Party, riding high in the polls, is widely expected to win the general elections as voters show their anger over the sluggish economy and the destruction of millions of jobs. Spain\'s unemployment rate at the end of June was 20.89 percent -- the highest in the industrialised world.Most smaller parties demanded a referendum, however. \"We are not going to vote for this reform of the constitution because of both the form and the substance,\" said Jordi Vilajoana, of Catalonia\'s Convergence and Union party.\"It is not reasonable to change the constitution in 15 days and without consensus,\" he charged.And on the eve of the vote, thousands of people joined a union protest in Madrid, Barcelona and other major cities expressing their opposition and demanding to have their say. But the Socialist spokeswoman warned lawmakers that a referendum would mean a risky delay.\"The referendum on the reform would be counterproductive and dangerous,\" Silva said. \"It would delay the reform and create more uncertainty. We cannot wait. If we wait, we won\'t get there.\"Under the constitutional change, Spain must stick to a long-term deficit cap except in times of natural disaster, recession, or extraordinary emergencies and even then only with approval of the lower house of parliament. An accompanying law to be enacted by June 30 next year would set the actual limit for the structural deficit at 0.4 percent of annual gross domestic product from 2020. The reform also obliges Spain to reduce its total accumulated debt to within the European Union-agreed limit of 60 percent of GDP.The Spanish reform comes at a time of high political tension across the eurozone with Italy battling to pass new austerity measures.Germany\'s top court helped sentiment Wednesday by ruling that aid for Greece and other rescue packages is legal. But it also said parliament must have a greater say in any future bailout. The yield on Spanish benchmark 10-year bonds slipped under 5.0 percent on Wednesday to 4.981 percent.The European Central Bank stepped in last month to buy tens of billions of eurozone bonds after nervous investors sold off Italian and Spanish debt, sending their borrowing costs above the six percent level considered as unsustainable.