The official figure is worse than expected. The deficit of Spain reached 8.51% of GDP in 2011, according to finance minister, Cristobal Montoro. The difference is significant compared to the 6% target that was assigned to Madrid. The European Commission has not responded. Brussels said Tuesday the Spanish Conservative government's commitment to reduce the public deficit from Spain to 3% of GDP in 2013 and has ruled out any flexibility despite the difficulties.
"The Spanish government is committed to the Commission and its sixteen partners in the euro area to reduce the deficit to 3% of GDP in 2013," recalled Olivier Bailly, a spokesman in exercise of the Commission. "We never relaxed the rules laid down to achieve objectives," he added.
The Conservative government led by Mariano Rajoy, who had warned when he took office last December that he expected a deficit of 8% – blaming the outgoing Executive, of the Socialist José Luis Rodríguez Zapatero – , can not expect any concession on the part of the Commission.
"The Spanish authorities have to present ourselves in the coming weeks a draft budget for 2012," said Olivier Bailly. "We know that the two goals deficit to 4.4% of GDP in 2012 and 3% in 2013 will be difficult to achieve for the Spanish economy, the Spanish Government and the Spaniards themselves," admitted the Spokesman of the Commission. "But there are rules and they must be respected," he said.
30 billion euros by December to find
The objective of reducing, this year, the public deficit to 4.4% of GDP, however, is regarded as unrealistic by most observers Same day payday loans. "It will be very difficult, Judge Juan Carlos Martínez Lázaro, an economist at the IE Business School. Mainly because of growth prospects. " The European Commission believes that the Spanish GDP will contract by 1% in 2012.
To get the deficit of 8.51% to 4.4%, the Conservative government should save some 45 billion euros. The first measures adopted by the executive have to trim 15 billion euro 9 billion in spending cuts and $ 6 billion in tax increases. That leaves 30 billion to find by December.
Substantial reductions will necessarily painful. They primarily concern the regions responsible for two thirds of the slippage in 2011. But these positions manage the most sensitive: the education and health, among others. "We'll have to look for new ways of funding," warns Martínez Lázaro. The copago, user fees at medical consultations, is already established in Catalonia. It could be applied in many other autonomous communities.
There remains the possibility of increasing the VAT back … even if, again, on an election commitment Rajoy. "If Brussels does not review the deficit target, Madrid will necessarily increase the VAT," said Professor Martínez Lázaro. But the Commission warned: "We need all the information on the 2012 budget," said Monday the Commissioner for the Economy, Olli Rehn. Madrid had rather wait for indications from Brussels before presenting his budget in late March.
ALSO READ:
"Brussels announced the recession in the euro zone
"The Spaniards against the reform of labor law
"Spain reduced dismissal costs