Mariano Rajoy, prime minister of Spain, said the budget deficit would be 5.8pc of GDP in 2012 - more than 30pc higher than the 4.4pc target agreed by Brussels. In a move that was heralded in Spain as defiance against the German-led austerity drive, Mr Rajoy said he had decided to set a new target rather than extract €44bn (£36.6bn) from the budget at a time of economic crisis. Mr Rajoy said it was now a "sensible and reasonable" target. "This is a sovereign decision made by Spaniards," he said. Spain's appeals to Brussels to relax the targets have been rebuffed in recent days. The European Commission has reportedly insisted on investigating the reasons for Spain missing its previous targets first. At the EU summit in Brussels this week, leaders said the targets were non-negotiable. Swedish Prime Minister Frederik Reinfeldt said: "The first thing that we do after the new rules [on budget stability] should not be to relax them." Mr Rajoy insisted the slippage was just on an interim target and Spain would still honour its commitment to bringing its deficit down to 3pc of GDP by 2013. But the announcement was seen as rebuffing other European leaders since the figures do not have to be confirmed until April.
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