STOCK MARKET WATCH -- Monday, 22 April 2013 -- Earth Day

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33. Spain’s deficit hit 10.6 percent of GDP last year, EU says

http://elpais.com/elpais/2013/04/22/inenglish/1366654318_846647.html

Spain posted the biggest public deficit within the European Union last year as a result of the EU bailout it was granted to clean up its banks. The task of taming the shortfall was exacerbated by the ongoing recession, which, the government acknowledged on Monday, could be up to three times deeper than it initially forecast.

The EU’s statistics office Eurostat estimates that Spain’s deficit last year came in at 10.6 percent. The second-biggest shortfall was posted by Greece at 10 percent followed by Ireland (7.6 percent) and Portugal (6.4 percent). Germany posted a surplus of 0.2 percent of GDP.

Without counting the bailout the shortfall in Spain’s accounts dropped from 9.4 percent in 2011 to 7.0 percent of GDP last year, when the government had targeted a figure of 6.3 percent.

The target for Spain’s deficit agreed with Brussels for this year is 4.5 percent of GDP, with the government committed to bringing the shortfall back within the EU ceiling of 3 percent of GDP in 2014. However, given the sclerotic state of the economic, Brussels is expected to grant the government more time to meet the 3 percent target. Whether it gets one or two years will depend on Brussels’ assessment of the government’s new macroeconomic scenario for the next three years and a new batch of reforms, which are expected to be unveiled this Friday.