The EC expects further efforts at Madrid's deficit
Posted by adminSpain will further savings this year and next if it is to achieve its ambitious goals of deficit reduction, since it will be in recession in 2012 and 2013 , according to European Commission forecasts released Friday.
The EC wrote in its economic prospects of the European Union biannual, that Spain should show a budget deficit of 6.4% of gross domestic product (GDP) in 2012 and 6.3% in 2013, unless you change the policies.
Madrid intends to reduce the deficit to 5.3% of GDP this year, against 8.5% in 2011 and, unless the finance ministers of the EU grant him more time to 3% in 2013, to save financial penalties.
Even though the objective of the central government seems at hand, differences are expected at this stage for regional governments, the Commission explains in its report.
She added that the Spanish social security system is likely to remain in deficit this year due to the deteriorating outlook for the labor market.
The EU executive has revised sharply lower its forecast for GDP growth Spanish, now anticipating a 1.8% contraction in 2012, instead of 1.0% pre ; seen in February.
For 2012, the EC is planning a further contraction of economic activity, 0.3%, while the Spanish government is 0.2% growth.
GROWTH FOR THE EURO AREA IN 2013
The EC believes that Spain will be the only country in the euro area to suffer a recession in 2013. She plans for the euro area as a whole increased by 1% next year, after contracting 0.3% this year.
"The recovery is in sight but the economic situation remains fragile, with still large disparities between Member States", said in a statement the European Commissioner for Economic and Monetary Affairs, Olli Rehn.
The combined fiscal deficit of the euro area would decrease to 3.2% of GDP in 2012, after 4.1% in 2011, and 2.9% in 2013.
"We're seeing an adjustment of fiscal and structural imbalances created before and after the crisis began and worsened by economic sentiment remains weak," says Rehn.
"Without new decisions energetic, low growth could persist in the EU. Sound public finances are a prerequisite for sustainable growth and, from an economic governance framework and strong again, we need to support the adjustment by accelerating the stability-oriented policies , and stimulation of growth "
. STAGNATION IN GREECE IN 2013
…… Regarding .. Greece, countries that initiated the crisis of sovereign debt in the euro area and now depends on funding from the EU and the International Monetary Fund, the EC expects zero growth in 2013, after contracting 4.7% in 2012, the fifth year of recession
. The budget deficit would fall to 7.3% of GDP in 2012 after 9.1% in 2011 but, unless Greece takes further steps to further reduce the die ; deficit, it goes back to 8.4% next year.
Portugal, which, like Greece, depends on the help of international donors, will be close to meeting its deficit targets this year and next, with a deficit of 4.7% in 2012 and 3.1% in 2013.
The Portuguese economy would suffer a contraction of 3.3% in 2012, after contracting 1.6% in 2011, then record a growth of 0.3% in 2013.
Ireland, the third countries in the euro area to take advantage of the coupled EU-IMF to grow by 0.5% in 2012, after 0.7% in 2011, and 1.9% in 2013. Its budget deficit would be reduced to 8.3% of GDP this year, after 13.1% in 2011, and 7.5% in 2013.