PM acknowledges "difficulties" of meeting targets

Prime Minister Mariano Rajoy told European leaders on Monday that it is going to be difficult for Spain to meet its pledge to reduce its budget deficit to 4.4 percent of GDP by the end of this year.

"We're going to present a new macroeconomic framework - the current one says that we'll have GDP growth of 2.3 percent this year but it is evident that it won't end up like this," Rajoy said after talks with European Commission President José Manuel Barroso, who, according to sources, asked Rajoy to approve the state budget before March. Barroso didn't respond to a question regarding this, and Rajoy denied that they had discussed it.

Later, Rajoy was overheard complaining about his difficulties to EU leaders during an informal encounter. "The labor reform is going to earn me a general strike," Rajoy told Finnish Prime Minister Jyki Katainen near an open microphone with television cameras rolling.

"It is always hard, but now it is going to get even harder," he said in another aside with Dutch Prime Minister Mark Rutte. "What it all boils down to is that [the Socialists] left us a very complicated inheritance, with a deficit of more than eight percent. And the forecast for growth this year is very bad," he concluded.