Columbia International Affairs Online: Policy Briefs

CIAO DATE: 02/2012

Spain's fiscal targets should be eased

January 2012

Oxford Economics

Abstract

The Spanish government has announced that the fiscal deficit for 2011 may be even worse than expected, perhaps even exceeding 8% of GDP. In response to this overshoot, the authorities have so far announced additional spending cuts and tax rises amounting to €15bn. But fiscal tightening will have to be even more severe if the government wants to meet its 4.4% of GDP deficit target for 2012.