16) «Spain would not achieve the EU ceiling figure until 2017»

by Javier Carro

Topics: Economy, Frontpage

16) «Spain would not achieve the EU ceiling figure until 2017»

The Spanish government is trying to trim the public deficit from 9.4 percent of GDP (gross domestic product) last year to 6.3 per cent this year and to 4.5 percent in 2013 before bringing it back within the EU ceiling of 3 percent of GDP the following year. However, the IMF (International Monetary Fund) earlier this month predicted the shortfall would hit 7.0 per cent this year and 5.7 percent in 2013 and forecast Spain would not achieve the EU ceiling figure until 2017.

Last week, the Spain´s Government told the European Commission that higher pension and jobless benefits would cause the Social Security system to suffer a deficit of 1 per cent of GDP when the Administration had been looking to balance its books. As a result of the government’s Spain austerity drive, the number of jobs lost in the public sector in the third quarter was 49,400, and 228,900 over the past 12 months. The private sector saw a fall of 47,600 in the quarter.

Spain´s “President” (Prime Minister) –Mariano Rajoy– said last week that he had yet to make his mind up on whether to ask for a second bailout to ease Spain’s borrowing costs. Spain would need to seek assistance from the permanent ESM (European Stability Mechanism) in order to trigger purchases of its sovereign debt in the secondary market by the ECB (European Central Bank). ∎

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