Monday, July 09 12:16:14
European Union finance ministers are set to grant Spain until 2014 to reach a deficit target of 3 percent of GDP, three EU diplomats said today, ahead of a meeting of ministers tomorrow where the decision will be taken.
"Spain's budget consolidation targets will be adjusted to give it an extra year," said one of the diplomats.
"This is not a unilateral move. Spain needs to make the necessary cuts to reach that goal and this will be discussed on Tuesday at the Ecofin (meeting of ministers). I expect the extra year to be granted." Two other diplomats said Spain would be given longer to reach its target in return for taking extra savings measures.
Under EU budget rules, Spain had been due to reduce its national budget deficit to 3 percent of gross domestic product by the end of 2013. But a deep recession, following the bursting of a housing bubble, has made that a challenging target. (C ) Reuters