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Spain shrugs off concern over budget plans

Source: Reuters - Fri 22th Nov 2013
Spain shrugs off concern over budget plans

Italy and Spain shrugged off on Friday European Commission concerns about their 2014 budgets, with Italy refusing to change its draft and Spain dismissing concerns as a mere difference in growth forecasts.

Using its new powers to judge national budget plans, the EU's executive arm last week reviewed the draft budgets of euro zone countries, the first time it has done so before they are sent to national parliaments to become law.

Although no plan was sent back to be reworked, the Commission said the budget outlines of Italy, Spain, Luxembourg, Malta and Finland could leave their governments in breach of EU laws on deficit and debt reduction.

Euro zone ministers will discuss the Commission's assessments in Brussels on Friday.

As far as Spain is concerned, the Commission said next year's budget draft was too optimistic about economic growth, while planned cuts in the structural deficit were too small.

Spain expects its economy to expand 0.7% next year after a 1.3% contraction in 2013. The Commission believes Spain will grow only 0.5%.

"It's a small difference and I would underline the Spanish government's determination to meet public deficit targets for 2013 and 2014," Spanish Finance Minster Luis de Guindos told reporters on entering the ministers' meeting.

"It is logical that the Commission warns us of the risks of not meeting targets. But we know this. We have a roadmap of reforms, some of which still need to be implemented," he said.