Spain Has Staked Its Financial Survival On Cutting Its Deficit

Madrid: Spain has staked its financial survival on cutting its bulging deficit, but analysts warn it will miss its key 2012 target, undermined by the very measures taken to try and meet it.
Prime Minister Mariano Rajoy has promised Spain’s European neighbours to cut the public deficit — the shortfall of revenues to spending — to 6.3 per cent of output in 2012, after they let him relax an earlier 5.3 per cent goal.
But a recession aggravated by budget tightening and widening holes in the finances of Spain’s big-spending regional governments have undermined his promise, as warnings have increased that Spain will need a full bailout.
“Nobody now believes it will be able to fulfill the target,” said Alberto Roldan, an analyst at Spanish brokerage Inverseguros.

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