Brussels says NO to Spain's request for an easier deficit target Brussels says NO to Spain's request for an easier deficit target Brussels says NO to Spain's request for an easier deficit target

Brussels has made it clear to Spain that it wants them to publish their budgets for this year before it enters into any discussion on relaxing deficit targets. Mariano Rajoy had been hoping to get the budget deficit for the end of this year changed ahead of the budgets which will be given at the end of March, after the Andalucía elections. Spain’s deficit target for the end of 2012 is 4.4%, but Rajoy thinks they will only be able to get somewhere above 5%. The European Commission also wants to hear Spain’s explanations why there was also a deviation last year, when 6% was the target and it came in at about 8%. Deputy President of the Commission and responsible for economic matters, Olli Rehn, said that there would be no flexibility in the deficit reduction targets for Spain this year, and the target for the year end remains at 4.4%, until the new Government presents information in the 2012 with more adjustments. Mariano Rajoy, who has been in Rome for talks with Mario Monti, had insisted earlier in the day that he would be talking to the European Commission on the deficit target. He also confirmed the 2012 State Budget would be March 30. The European Commission has also published its economic forecasts for Spain today, forecasting a more gentle recession for Spain for this year. It says there will be a fall of 1% in GDP over this year, a favourable number compared to the 1.5% fall expected by the Bank of Spain and the 1.7% fall forecast by the International Monetary Fund. However it also indicates Spain will be back in recession in the first quarter. The Eurozone as a whole will see a fall of 0.3% of GDP this year.

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