Spain must stick to deficit-cutting schedule: Rehn

 

It is essential that Spain keep on track in correcting its excessive deficit, Olli Rehn, the EU's economic and monetary affairs commissioner, said on Friday.

"I regret the sizable fiscal slippage relative to the 2011 budgetary target," Rehn said in a statement.

"It is all the more important now that Spain remains fully committed to the fiscal consolidation path and stays determined to correct its excessive deficit by 2013 as scheduled."

Spain's new government said on Friday that this year's budget deficit would be much larger than expected, and it announced surprise tax hikes and wage freezes.

Rehn said he welcomed Spain's package of policy measures as "a very important step to shore up public finances and reassure financial markets".

The European Commission would carry out a detailed assessment of the larger-than-expected slippage and the budgetary impact of the new package once it received all the details, he said.