Spain warns of deficit overshoot

Spain’s new centre-right government warned on the 30 December 2011 that the 2011 budget deficit was likely to reach 8% of GDP, much higher than expected and a full 2%, or €20bn, above the target agreed with the European Union.

Soraya Sáenz de Santamaría, deputy prime minister for the Popular party government that took office in December 2011, announced immediate cuts of €8.9bn in annual public spending and tax rises worth €6bn (going back on an election pledge not to raise taxes).

ESO: Background information: Spain’s Rajoy unveils plans for rapid economic reform http://www.europeansources.info/record/spains-rajoy-unveils-plans-for-rapid-economic-reform/

BBC News, 30.12.11: Spain sets out 8.9bn euros of new austerity measures http://www.bbc.co.uk/news/business-16364313

El País, 30.12.11: New government renegades on campaign tax pledge http://www.elpais.com/articulo/english/New/government/renegades/on/campaign/tax/pledge/elpepueng/20111230elpeng_1/Ten

El País, 29.12.11: Economy most likely contracted in last quarter of 2011, says central bank http://www.elpais.com/articulo/english/Economy/most/likely/contracted/in/last/quarter/of/2011/says/central/bank/elpepueng/20111229elpeng_15/Ten

El País, 27.12.11: Bleak 2011 to end with worst home sales and construction data in decades http://www.elpais.com/articulo/english/Bleak/2011/to/end/with/worst/home/sales/and/construction/data/in/elpepueng/20111227elpeng_5/Ten

European Commission: RAPID: MEMO/11/949: Statement of Vice President Olli Rehn on the approval by the Spanish Government of extraordinary fiscal measures and the fiscal slippage in Spain http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/11/949&format=PDF&aged=0&language=EN&guiLanguage=en

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