Spain’s Deficit Progress Creates Cushion for Cajas: Euro Credit

Spain’s efforts to shrink the euro region’s third-biggest budget deficit may be succeeding, easing investor concern that the cost of bolstering the country’s savings banks will swell the public-debt burden.

Spain publishes as soon as this week the central government’s deficit for last year, which accounts for the bulk of the nation’s overall shortfall. The deficit fell 46 percent in the first 11 months of 2010, though December is the biggest month for spending. By contrast, Portugal’s central government shortfall widened.