The economic outlook for Spain worsens further still according to a recent report from the European Commission. According to the EU, Spain will not meet its deficit objective for 2012 and 2013, GDP will contract 1.8% this year and general unemployment will hit 25.1% in 2013.
The EU plans to make its recommendations later this month, mostly to allow Spain's national and regional governments to meet and determine budget cutbacks for the latter. The EU believes that the country's largest problems reside in its regional governments and in the deterioration of Social Security services that are without a doubt operating at a deficit.
The formula for avoiding an EU sanction and meeting upcoming deficit objectives is to enact stiff control on regional government budgets and widen existing cutbacks. Once again, we find ourselves saying, "We have no other choice."
