Spain to rely on EU growth forecasts

The European Union will decide what Spain's deficit goal should be for 2012

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Madrid: The European Union will decide what Spain's deficit goal should be for 2012, as the current target is based on outdated forecasts that Spain would grow this year, Budget Minister Cristobal Montoro was quoted as saying by La Vanguardia.

The new government won't make its own growth forecasts and will use the European Commission's numbers instead. The IMF's forecast that Spain's economy will shrink 1.7 per cent this year is "realistic," the newspaper quoted him as saying in an interview published yesterday.

Committed

"Based on this new reality, the deficit goal they set for us will be established, and we are firmly committed to meeting it," Montoro was quoted as saying.

"What Spain advocates in Brussels is reaching stability in a realistic way."

Spain won't need to seek IMF help, nor will it tap the EU's bailout funds to finance the overhaul of banks, Montoro said. The government won't raise value-added tax, he added.

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