Spain Tweaks Deficit Result That Undermined Record on Spending

  • Revision comes a week after government called for 5.2% miss
  • Watchdog, opposition blame Rajoy administration for shortfall

Spain revised downwards its 2015 budget deficit a week after announcing it as the government maneuvered to shore up its credentials as steward of the nation’s finances.

The country ran up a 5.1 percent deficit last year compared with the 5.2 percent shortfall announced March 31, Acting Budget Minister Cristobal Montoro said in parliament Thursday. Montoro said the revision was the result of a change in methodology by the European statistics office, Eurostat.

Acting Prime Minister Mariano Rajoy has come under fire this week over his management of public finances in the run-up to inconclusive general elections held in December. Spain’s fiscal watchdog said it said repeatedly warned that the nation was on course to miss its deficit target for an eighth straight year but that the government had brushed off its warnings. Rajoy himself in February predicted the deficit would be 4.5 percent compared with a target of 4.2 percent.

“The recently announced results surprised everyone, in particular the commission,” said European Central Bank Vice President Vitor Constancio in a speech at the European Parliament in Brussels.

Even as the fiscal watchdog Airef warned about risks to the deficit as early as last July, Rajoy and his finance chiefs signed off on a series tax cuts in the run-up to the December ballot. Montoro last week blamed the deficit miss on over-spending by regional administrations.

“I don’t find your jokes funny, Mr Montoro, you lied to our European partners,” said Pedro Saura, member of the Socialist party, addressing a parliamentary committee in Madrid Thursday. “You’ve called into question the credibility of this nation. You should have resigned.”

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