The Spanish government is proposing to tie its spending to the overall health of the economy _ yet another deficit-control measure designed to distance Spain from Europe's bailed-out countries.
The move was announced by Deputy Prime Minister Alfredo Perez Rubalcaba after a weekly Cabinet meeting Friday. The Cabinet recommended that Spain's semiautonomous regional governments do the same, but it cannot order them to do so. Bloated deficits run by some regions has become a source of concern as Spain tries to reduce spending and allay fears it might join Greece, Ireland and Portugal in needing outside help.
Under the change, which goes before Parliament for a yes-or-no vote without debate, annual budget spending will be set taking into account how GDP has performed over the past five years, and how it is forecast to do in the following three.
With unemployment at 21.3 percent, the government has also passed reforms designed to help Spanish homeowners who cannot make their mortgage payments and face foreclosure and eviction.
Once foreclosure has been approved formally by a court, the bank that holds the mortgage can claim a certain percentage of the homeowner's wages. Friday's change allows such a person to hold on to more of their wages.
A judicial oversight board says that from 2008 to 2010, banks and other lenders filed foreclosure proceedings on nearly 300,000 families in Spain. The number last year was almost 100,000, four times that of 2007, the year before Spain slid into recession with the bursting of a real estate bubble.
The economy is now growing but only tepidly, and interest rates on the adjustable mortgages that the vast majority of homeowners hold are rising, putting a further squeeze on people already struggling to make ends meet.
Socialist Prime Minister Jose Luis Rodriguez Zapatero is not seeking another term in office. Elections must be held by March of next year, but he is under increasing pressure to call them early. Opposition conservatives are favored to win easily.
Many Spanish media depicted an annual state of the nation debate this week in Parliament as a long and at times emotional farewell session for a defeated and weak Zapatero.
Zapatero has said he wants to serve out his full term, but it seems far from clear this will happen.
The normally pro-government newspaper El Pais described Friday's economic reforms as an attempt by the government to show it is still taking initiatives and has not simply given up as it ponders when to call elections it will almost certainly lose.