Spain’s budget gap may result in EU fine

BRUSSELS - Agence France-Presse

Spain’s PM Mariano Rajoy speaks during a news conference at Moncloa Palace in Madrid yesterday. REUTERS photo

Spain is at risk of a test case and possible fine under new EU rules for a “grave” breach of budget limits, the European Commission said yesterday.

The overshoot amounted to tens of billions of euros, it said.

“We need to shed full light on what went on Spain in 2011,” EU Economy Commissioner Olli Rehn’s spokesman Amadeu Altafaj said of what he called a “serious, grave” gap in the figures. Altafaj said Madrid warned Brussels on December 30 of a slide of two percentage points compared with output on its deficit target for 2011, then another half a percentage point two days ago.

Spain’s 2011 public gap was supposed to come in at 6.0 percent of gross domestic product (GDP), but at 8.5 percent, that meant the state spent 90 billion euros ($119 billion) more than it took in last year.