PP violated budget stability pact, say Socialists

The opposition Socialists announced on Tuesday that they will vote against Prime Minister Mariano Rajoy's law capping the budget deficit when it reaches Congress because they feel that it goes beyond the terms of what the PP and the previous government of José Luis Rodríguez Zapatero agreed upon last year.

At the same time, Finance Minister Cristóbal Montoro and Economy Minister Luis De Guindos continued to take opposition positions over the bill, which would prevent future governments from overspending.

Montoro was insisting that the proposed law contained exactly what the PP and Socialists agreed upon last August before Congress voted to include an article regarding budget stability in the Constitution.

But De Guindos recently told financial experts at the World Economic Conference in Davos that the government will opt for a zero-percent deficit instead of the 0.4-percent figure agreed upon by the two major parties in August.

"Our discrepancies are profound and you know it, Mr Economy Minister," said Valeriano Gómez, the Socialist spokesman for the economy, in Congress. "You know that we agreed on a structural deficit of 0.4 percent that could be surpassed in extreme circumstances and now the law states a structural deficit of zero, and 0.4 percent in extreme circumstances. Under these conditions we will vote no if the law isn't changed."