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8 September 2011 Last updated at 07:21 GMT

Spanish Socialists take high-risk gamble on deficit reform

By Sarah Rainsford BBC News, Madrid

Opponents of the reform have taken to the streets

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Spain's governing Socialist party is battling to rescue its battered approval rating ahead of a general election on 20 November. But a new policy intended to reassure investors of Spain's solvency is threatening to do even more damage to the party at the polls.

The reform, approved in the Senate on Wednesday, enshrines the principle of budget stability in the constitution. It makes Spain the second eurozone country after Germany to set a legally binding cap on public debt and deficit levels.
Prime Minister Jose Luis Rodriguez Zapatero presented it as "critical" to create confidence in the country's finances, as nervous financial markets pushed the cost of government borrowing towards unsustainable heights.
But his surprise reform - the first significant change to Spain's young constitution - has provoked a wave of angry street protests, by trade unions among others, as it has been fast-tracked through parliament. It has also sparked a rare rebellion within the Socialist Party itself.
"For me, this reform is a grave error - it's nonsense, politically and economically," says Antonio Gutierrez, a Socialist deputy in parliament who voted against the party line for the first time ever. That stance earned him a fine of 600 euros (£525; $850).
"I think this is a disgrace for my country, and will damage the party's chances further in the elections," he told the BBC.
Three other Socialist deputies boycotted Friday's vote in the lower chamber of parliament both in protest at the reform's content and the lack of consultation. Even the defence minister expressed reservations, and Antonio Gutierrez says many deputies admitted in private to their concerns.
"Four or five rebel deputies isn't critical, but it's a sign of how hard this reform was for the party to accept," explains Joan Vintro Castels, professor of constitutional law at Barcelona University.
"In the end, the party leaders managed to convince people because a divided party would have been catastrophic just two months before elections."