Brussels/Copenhagen, 02/04/2012 (Agence Europe) - On Monday 2 April, a spokesperson for EU Euro Commissioner Olli Rehn said that the European Commission would be making a detailed analysis of Spain's draft budget for 2012 this week, as soon as the conservative government headed by Spanish Prime Minister Mariano Rajoy has submitted the details to the Spanish parliament, assuming that information is available about central government and regional spending. Unveiled in Madrid on Friday and discussed at the ECOFIN Council in Copenhagen at the weekend (see EUROPE 10586), Spain's draft budget included extra spending cuts totalling €27 billion despite the fact that the country has entered a new period of recession. The idea is to bring the public deficit down from 8.5% of GDP to 5.3% this year, and then to below 3% in 2013. This will be a real challenge because the budget is not expected to have any impact until June.
In Copenhagen, Rehn said Spain was demonstrating determination in its budget and structural policies. He welcomed the decision to stick to a deficit reduction target of 5.3%, decided recently in agreement with the Eurogroup.
After announcing to the world that it had rejected the 4.4% target set by the previous, socialist, government, Rajoy decided to go for 5.8% this year, which was later reduced to 5.3%. Rehn said that the government's unequivocal commitment to the 3% target in 2013 was the most important thing and he expected it to be achieved by means of a convincing series of budget measures and economic reforms. Agreeing with Rehn, ECB representative Jörg Asmussen wanted the draft budget to have an impact as soon as possible in 2012, even if that means bringing in emergency austerity measures. Spanish economy minister Luis De Guindos pointed out that the government had taken a balanced approach with an ambitious budget to ensure financial stability while limiting the negative short-term impact of the recommended measures. (MB/transl.fl)