For the second time the EU has corrected Spain's 2012 deficit, which it now says is 7.1% of the nation's GDP compared to its last revision of 6.9% and the 6.7% that the government announced most recently. All of these levels are far from the government's original 6.3% forecast.
After the financial sector bailout, the deficit rose to 10.6% and the highest of all EU nations. Cristóbal Montoro received the news yesterday during while he was surrounded by journalists. Once again, it seemed like he does not see the real picture. He assured that Spain has met its deficit objectives and insinuated that the reporters don't know the details of his job. There is a lot of "fanfare and noise," said Montoro among other derogatory comments directed to people protesting in the streets and the media that do not side with Montor's point of view. The reality is that another year has passed without balancing the budget. Despite Montoro's assurance that "we cannot allow any slack," he has not reigned in the national and regional government deficits. The government orginally said the deficit was 6.7% of GDP, and now that we know that it is really 7.1%, four billion euros will be added to the national debt.
The Ministry of Finance did not try its hardest to combat the deficit and has left tax and public sector reforms pending while the national debt has surpassed 84% and the 2013 budget will suffer from overly-optimistic tax revenue forecasts. All this "noise and fanfare" is what bothers Montoro, but the Finance Minister is letting a lot of excited talk distract him from the fact that many of the criticisms of him are valid and that the deficit situation is a real problem for Spain.
