Spain's 2012 Deficit Falls, But Not To Level Hoped

MADRID (AP) â¿¿ Spain's Prime Minister Mariano Rajoy has conceded that the government just failed to reduce its budget deficit in 2012 to the level it promised European authorities.

He says the deficit fell to 6.7 percent of the country's annual gross domestic product from 9 percent in 2011.

The reduction, which came after a raft of spending cuts and tax increases, is just above the 6.3 percent Spain promised European authorities.

Rajoy's deficit figure does not take into account the ⿬40 billion ($52 billion) bailout granted to ailing Spanish banks by Spain's partners in the 17-country eurozone. Including the bailout, the deficit would be higher. The executive European Commission has allowed Spain not to count the bailout.

Spain is in its second recession in three years and has 26 percent unemployment.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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