Unions rally against planned deficit cap rule

Spain's main labor unions, CCOO and UGT, along with a number of pressure groups on Monday called for a series of protests against the plan agreed by the ruling Socialists (PSOE) and the main opposition Popular Party (PP) to include a generic obligation to balance the country's books in the Constitution as the PSOE sought to rally a divided party behind the controversial move.

The program includes a "big demonstration" in Madrid on September 6 and other protests in the rest of the country for August 31 and September 1, when Congress and the Senate are due to debate the constitutional amendment, which will be accompanied by an organic law limiting the public deficit for the central government and the regions at 0.4 percent of GDP.

Thousands of protesters took to the streets on Sunday against the reform aimed at appeasing the markets, which have questioned the government's ability to service its debt.

"The objective of these demonstrations [...] is to show our rejection of the constitutional reform proposed by the PSOE and the PP, to ask that deputies and senators do not vote in favor of it in parliament, and to demand that if the proposal is approved for it to be subject to a referendum," CCOO official Ramón Górriz told a news conference.

High-ranking PSOE official Marcelino Iglesias said a referendum "would transmit uncertainty to those to whom we want to transmit certainty; namely the markets." Moody's on Monday welcomed the deficit cap as "credit positive."

The unions claim the deficit clause is an attack on the welfare state and would limit government policy making.

"The reduction in the deficit will only be achieved by undermining the economic and social fabric," Górriz said. "This is another sacrificial offer to the markets that won't serve anything."

UGT official Toni Ferrer said the unions did not rule out calling a general strike.

The proposed reform has left a number unhappy in the Socialist rank and file. The PSOE's candidate for prime minister in the general elections to be held on November 20, Alfredo Pérez Rubalcaba, on Monday held a series of meetings at different levels of the party to muster backing for a reform he said aims to "show that Spain is a serious country."