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.
Read More:
- Italy, Spain: Two New Governments Threaten the Eurozone's Stability (June 1, 2018)
- Italy and Spain Rattle the Eurozone (May 29, 2018)
- Spain: After Elections, Catalonia Faces a New Year as Complicated as the Last (Dec. 22, 2017)
