Wednesday, March 14, 2012
S'PAIN MAIL: SPAIN PM, "NEWT WORLD" DEFICIT TARGET REASONABLE, A-CHIEF-ABLE
SPAIN PM: "NEWT WORLD" DEFICIT TARGET REASONABLE, A-CHIEF-ABLE
MADRID (Dow Jones)--Spain's prime minister Mariano Rajoy Wednesday defended his government's handling of a recent dispute with the European Union over the country's budget deficit, saying the new deficit target agreed with the EU partners is reasonable if not ideal.
Speaking in a parliamentary debate, Rajoy said additional deficit cuts worth over EUR5 billion this year will have a negative, short-term effect on growth but don't essentially modify Spain's economic outlook.
The cuts were requested Monday by euro-zone finance ministers and accepted Tuesday by Spain's government. Budget minister Cristobal Montoro said Spain's central government will implement the additional cuts, coming on top of previous austerity plans, instead of the cash-strapped regional governments.
Spain's budget deficit last year stood at 8.5% of gross domestic product, or close to EUR90 billion. Spain's government said earlier this month it planned to lower that to 5.8% of GDP this year, but EU objections led to the current objective of 5.3% of GDP.
-By David Roman, Dow Jones Newswires, +34 91 395 8127; email@example.com
Posted by Eileen at 1:36 PM