Guindos Pledges No New Austerity While Telling EU Spain May Act
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Spain sent mixed messages on the state of its finances as Economy Minister Luis de Guindos said its 2012 deficit target can be met without more spending cuts, after telling European colleagues extra measures had already been prepared.
The Spanish government is facing mounting skepticism about its ability to narrow the budget gap without further austerity after the central government exceeded its full-year deficit target in the first six months due to the cost of propping up the regions. Spain has introduced more than 100 billion euros ($131 billion) of spending cuts and tax increases to try to limit the shortfall to 6.3 percent of gross domestic product.