situation report

Aug 22, 2018 | 15:46 GMT

1 min read

Spain: Party Demands Law Requiring Balanced Budget Be Repealed

What Happened: Spain's Podemos party is saying it will not support a proposed budget for 2019 unless a law requiring Spain to retain a balanced budget is abolished, El Pais reported Aug. 22.

Why It Matters: A move to alter Spain's course from deficit reduction to deficit increase could cause market uncertainty. Any failure by Spanish lawmakers to approve a budget could force the country's government to resign or extend the previous budget.

Background: Spain introduced a law requiring a balanced budget during the peak of a financial crisis and under pressure from the European Union. Spain is currently ruled by a minority government that includes Podemos, making the party's votes necessary to pass the budget.

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