The Spanish government has announced it has succeeded in bringing down the country's budget deficit. But it also had to concede that progress had not been big enough to meet the target set by EU authorities.
Spanish Prime Minister Mariano Rajoy announced on Wednesday the government managed to significantly reduce the country's budget deficit in 2012.
He said it fell to 6.7 percent of gross domestic product last year, down from 9 percent in 2011. Rajoy noted the reduction came after a series of spending cuts and tax increases.
But even the drastic austerity course imposed by Madrid was not able to bring Spain's spending and borrowing parameters in line with the targets set by the EU executive.
Brussels had originally hoped for Spain to post a 2012 deficit of just 6.3 percent, but in a recent winter forecast, it considered the country's situation to be much worse, expecting Madrid to log a deficit of over 10 percent.
The Spanish prime minister argued the deficit reached was the result of an "enormous effort" society had made to cut spending.
The 6.7-percent deficit announced Wednesday did not take into account a 40-billion-euro ($52-billion) bailout granted to Spain's ailing banks by European partners.
ECB Chief Economist Peter Praet acknowledged Spain's endeavors to cut its deficit, saying it had done so in a far more dramatic manner than many other nations hit by the debt crisis. He called on the euro area not to let up in efforts to consolidate national budgets.
"We urge eurozone governments to keep up efforts to implement required structural reforms in the bloc," Praet said in a statement, adding that he was confident that even the most crisis-stricken southern nations would soon be able to return to a path of sustainable growth.
hg/kms (dpa, Reuters, AP)