EU to extend Spain’s 3% public deficit deadline to 2014

BRUSSELS–Eurozone finance ministers agreed to extend a 2013 deadline for Spain to cut its public deficit to the EU 3.0 percent limit by one year, Eurogroup head Jean-Claude Juncker said Tuesday.
Juncker told a press conference that the deadline was extended until 2014 in view of the difficult economic conditions Spain faces, but stressed that Madrid must implement all the measures needed to bring its public finances into line with EU norms.

European economic affairs commissioner Olli Rehn insisted that Spain will have to meet all the obligations under the EU’s excessive deficit proceedures.

Rehn, speaking after more than nine hours of ministerial talks in Brussels, said the EU now expected Spain’s public deficit — the shortfall of revenue to spending — would be 6.3 percent of Gross Domestic Product this year, falling to 4.5 percent in 2013 and then 2.8 percent in 2014.

Spain in May revised its 2011 public deficit figure, saying that it stood at 8.9 percent of gross domestic product instead of the 8.51 percent reported earlier.

The same month, the EU warned that Spain would miss its public deficit targets this year and next while remaining in recession through 2013.

The conservative government of Prime Minister Mariano Rajoy has pledged to cut Spain’s public deficit to 5.3 percent this year.