Spain's deficit reduction target set by Europe will be 'very difficult' to meet
Spain's deficit reduction target set by Europe will be 'very difficult' to meet
THE Bank of Spain, the OECD and president Mariano Rajoy all believe it will be practically impossible for the country to reduce its national deficit in time as required by Europe.
Spain's target this year was to cut its debt to 6.3 per cent of the Gross National Product, after having a limit of 8.9 per cent for 2011.
And by 2014 it is required to have slashed the deficit to zero.
But Spanish authorities and economists believe this is very unlikely to happen.
The debt currently sits at 8.1 per cent of the GNP, and Rajoy says it would be 'very difficult' to cut it by the required 2.6 per cent with the country in recession.
Economists are also predicting that interest rates in the Eurozone will plummet once more in early 2013, even though the Euribor has already fallen to a record low of 0.75 per cent.
The obligation to cut Spain's deficit is the reason behind the huge funding cuts in social and welfare programmes and steep tax hikes the country has seen in the past 12 months.
