Spain's government and regional authorities have reached an agreement on local spending limits, the economy minister said on Wednesday. A deficit target of 1.3 pct of GDP has been agreed for the regions for 2012 and 1.1 percent for 2013, Economy Minister Elena Salgado told journalists.
For 2014, the deficit target will be 1 percent of the GDP of each region, Salgado said.
The central government has said it will reduce Spain's public deficit to 6 percent of GDP this year after 9.2 percent in 2010, but is likely to miss this target if too many regions are unable or unwilling to reduce their own shortfall.
International investors are concerned the euro zone's fourth largest economy, hamstrung by anaemic growth rates and high unemployment, will fail to put its fiscal house in order and need a Greek-style bailout, nervousness which has sent bond yields to their highest level in over a decade.
In the first quarter, the regions registered a deficit worth 0.46 percent of GDP.
