February 25, 2020 / 9:24 PM / a month ago

Spain changes deficit law in first legislative win for left-wing coalition

FILE PHOTO: A view of the facade of Spain's parliament is pictured a day after Spain's general election, in Madrid, November 11, 2019. REUTERS/Jon Nazca

MADRID (Reuters) - Spain’s parliament on Tuesday approved a change in a law setting out the country’s deficit targets for 2020 to 2023, the first major legislation pushed through by the Socialist Party’s minority coalition with the far-left Unidas Podemos.

Lawmakers approved a new deficit goal of 1.8% of gross domestic product, marking the first time Spain has been able to set its own targets since the European Union imposed special deficit measures during the financial crisis.

While the target is lower than last year’s estimated 2%, it is higher than previous forecasts and marks further divergence from a trajectory agreed with the European Commission two years ago.

Spain is no longer bound by the Commission’s excessive deficit procedure, but the EU executive still has the last word on whether to give the green light to member countries’ budgets.

Under the proposed law, the deficit targets then narrow to 1.5% in 2021, 1.2% in 2022 and 0.9% in 2023.

The motion passed with a majority of 198 votes to 134 with seven abstentions. Center-right Ciudadanos lent its support to the law, which was opposed by the conservative People’s Party and far-right Vox.

Lawmakers can now suggest amendments to the law, which will then be sent on to the upper house, where the Socialists and their allies have a majority, for confirmation.

Reporting by Belén Carreño; Writing by Nathan Allen; Editing by Alison Williams

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