Re: Re: Spanish budget…


Remember when last week Spain disclosed the terms of its 2013 Austerity budget, and everyone, literally, came out of the trunk in the ZZ Top wagon, including Olli Rehn who said Spain had done even more than Europe demanded, which led many to believe this was the basis for Spain preparing to announce its bailout request? Well, today Europe is kinda, sorta force to reevaluate said statement, and poor Mr Rehn has to self-flagellate himself in some Helsinki sauna for speaking too fast, because over the weekend Spain preannounced (the first of many) 2012 budget target misses. The Spanish government said the deficit would hit 7.4% of GDP, which misses the 6.3% target set for the year. The 6.3% number in turn, was a “loosened” goal as the original deficit target for the country set by the Commission was 5.3%. What will happen is that at some point, in late December just like in 2011, Spain will say it was only kidding and the real budget deficit will be in the double digits, or about 100% more than the preliminary announced one. But don’t worry: in 2013 all shall be well: IMF, ECB, Spain and Princeton economists all over the world promise, so it must be.