Spain rethinks its 2012 deficit goal

[February 29, 2012]  MADRID (AP) -- Spain's prime minister, Mariano Rajoy, is reassessing his government's stated deficit-reduction goal, saying that the country will do the best it can to chip away at it.

Rajoy spoke two days after the government revealed that government deficit for 2011 was 8.5 percent of GDP, far above the 6 percent forecast by the previous government.

Spain's commitment to the EU is to get it down to 4.4 percent this year. But achieving that from 8.5 percent would require austerity measures that many in Spain see as unfeasible.

Rajoy told reporters Wednesday Spain would cut the deficit this year "as much as we can."

The heightened deficit comes as the country is about to enter another recession, with unemployment at nearly 23 percent.

[Associated Press]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.