Spanish Prime Minister Mariano Rajoy said Friday he would now aim to hold his country's public deficit in 2012 at 5.8 percent of GDP, well wide of the 4.4 percent agreed with the EU.
Rajoy's announcement, made as he left an EU summit which saw recession-ravaged Spain return to the euro debt crisis frontline, leaves the government in Madrid well wide of the mark for the second year running and potentially facing EU sanctions.
Rajoy said the new 5.8-percent figure Spain is aiming at was a "sensible" target, despite eurozone partners having said they expected Madrid to stick to the plan agreed with the Eurogroup of finance ministers.
The Spanish government came under mounting pressure over two days of talks in Brussels also gathering finance ministers, after the country's 2011 public deficit estimate grew to 8.5 percent of gross domestic product from a previous forecast of 6.0 percent.
Without giving out the figure, Rajoy's Finance Minister Luis de Guindos said on Thursday that "given the changed circumstances, it is foreseen that a process of negotiations will begin now."
The conservative minister said the target set by the socialist government that was voted out late last year, was calculated on the basis of a growth forecast of 2.3 percent this year.
"Mr Rajoy must present it by the end of March and this budget will have to conform fully with the rules of the Stability and Growth Pact," Barroso said, referring to the EU's fiscal rules.
Source: AFP Global Edition