>> Spain's 2017 draft budget, several months late and long awaited. It's a fork in the road for Spain's path of austerity. And according to Reuters correspondent Paul Day in Madrid, it's a big test for Prime Minister Mariano Rajoy. Who's had to do some serious compromising.>> Rajoy no longer has a majority in Parliament.
And he needs to produce a budget that other parties can get on board. So this budget is going to be less austere, or it will try and give sweetness to the other parties. It'll include social welfare, increases in spending. There'll be no tax hikes.>> The draft goes against Rajoy's previous instinct to meet EU deficit targets with serious cuts at home.
Now that Spain's economy is on the up, and largely because he didn't have a choice. He's betting on more growth rather than less spending. Rajoy has said if we can't produce a majority to get important reforms such as the budget through parliament, maybe we need another election. They're politicians, who knows?
He may well be just blowing hot air. The fact is is that if this hadn't gone through, he may well have tried to force another election.>> Another election is probably the last thing Spain needs right now. Hung elections of December 2015 and June 2016 effectively left the country with no government for the majority of last year.
Before now, most analysts thought Rajoy would struggle to see out his whole four year term. Successfully passing through this budget is a sure sign of changing fortunes.