Rajoy dresses up EU deficit wrist-slap as leftover leftist legacy

Mariano Rajoy on Wednesday sought to paint a further deficit reduction demand imposed on Spain by Brussels as backing for his cost-cutting proposals. The government had unilaterally set a target of 5.8 percent of GDP for 2012, which it presented to the European Commission last week.

However, Brussels was unimpressed with the prime minister’s numerical chicanery and slapped a further 0.5 percent on to Spain’s deficit target for the year — equivalent to five billion euros. The government now faces the task of slashing 35 million in expenditure this year, a Herculean job that Rajoy has not yet fleshed out with clear objectives.

Rajoy was at pains to highlight the previous Socialist government’s “non-fulfillment” of last year’s deficit target of six percent and said that his government was now trying to “restore Spain’s credibility” in the international markets and at the EU. At the end of last year the nation’s deficit stood at 8.5 percent of GDP.

The leader of the Socialist opposition, Alfredo Pérez Rubalcaba, accused the government of improvisation and called Rajoy’s figure juggling “a botch.” He also called on the administration to follow France’s lead in adopting a financial transactions tax and criticized the Popular Party for delaying the unveiling of the 2012 budget.

Rajoy is due to present his cost-cutting measures on March 30, five days after regional elections in Andalusia that are widely expected to go the PP’s way, further tightening the conservative party’s grip on power at national and local level.