MADRID Dec 22 The European Commission will give
Spain and France more time to cut their public deficits below
the target limit of 3 percent of GDP, leading Spanish newspaper
El Pais reported on Saturday.
Citing senior sources at the European Commission and in the
Spanish government, the daily said France would be given an
extra year until 2014 rather than 2013 to rein in its fiscal
gap, while Spain would be given until 2015 or 2016 rather than
The European Central Bank is keen to grant Spain one extra
year while the International Monetary Fund (IMF) is pushing for
two years more, the newspaper said.
Spain sought support from its European partners this year
for its ailing banks, hit by a burst property bubble. Recession
is also undermining government efforts to keep the public debt
burden in check, and financial markets expect Madrid to seek
sovereign aid sometime next year.
Spain's Prime Minister Mariano Rajoy might delay an aid
request if the European Commission announced new fiscal targets
for the country in a review due on Feb. 15, the paper said.
According to El Pais, the Commission has agreed for Spain on
a new deficit path of 7 percent of economic output in 2012 and 6
percent in 2013. That compares to current targets of 6.3 percent
for 2012 and 4.5 percent for 2013.
The paper also said the Commission would require Spain in
return to agree to new structural reforms, including a new