First come clean on deficit, then we'll talk, EU tells Spain

Feb 23, 2012, 11:55 GMT

Brussels - The European Union's executive said Thursday it wants full disclosure from Spain about the state of its finances before it can discuss any watering down of its deficit reduction targets.

Spain's deficit is believed to have reached 8 per cent of its gross domestic product (GDP) in 2011, two percentage points higher than its EU target. That has fueled expectations that it would seek a relaxation of this year's target of 4.4 per cent.

'We can only come back to this issue once we have full information' on the extent of the 2011 deficit and the corrective measures foreseen for 2012, EU Economy Commissioner Olli Rehn said, noting that last year's deficit figures would be published in April.

Meeting the 4.4-per-cent of GDP target in 2012 would require a 40-billion-euro austerity package - a huge effort that would weigh down an already depressed economy. The Spanish newspaper El Pais said Thursday the EU may be 'slightly flexible' on the matter.