The FINANCIAL -- The European
Commission on Wednesday took some pressure off Spain by saying it would
not require more austerity measures this year and next even if Madrid is
unable to meet budget commitments.
"The Commission's view is that no further steps in the excessive deficit procedure of Spain are needed at present," European Economic Affairs Commissioner Olli Rehn told a press conference in Brussels.
Spain has taken effective action for 2012 and 2013, he said, while warning that "the measures announced so far for 2014 fall short of what is required by the revised Council recommendation," Rehn added.
He referred to a recommendation by the European Council, which comprises the heads of state or government of the EU member states.
"There are also risks of more budgetary slippages" by autonomous Spanish regions, Rehn added.
He spoke a week after the European Commission released economic forecasts that suggested Spain would miss its deficit reduction targets in 2013 and 2014, and remain in recession next year with a contraction of 1.4 percent in its national output.
As EUbusiness reported, the Commission expects the Spanish public deficit to amount to 6.0 percent of gross domestic product (GDP) in 2013 and 6.4 percent in 2014, far above targets set by Madrid of 4.5 percent deficit next year and less than 3.0 percent, the EU limit, in 2014.
Rehn acknowledged that Spain "is undergoing a very difficult re-balancing of its economy after many years of unsustainable policies."
He underscored that the government and population were making real efforts to get the public accounts back in shape, something that required "hard choices, and sacrifices for many parts of the population."
In Madrid, riot police fired rubber bullets into the air and struck protesters with batons in the central Plaza de Cibeles square on Wednesday during clashes on the sidelines of protests against austerity measures.
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