Bloomberg News

Spain Opposition Leader Says Regions’ Deficit Goal ‘Difficult’

October 24, 2011

(Updates with comment in second paragraph. (For more on Europe’s debt crisis, see EXT4.)

Oct. 24 (Bloomberg) -- Spain’s opposition leader Mariano Rajoy said it will be “very difficult” for Spain’s regional governments to reach their deficit goal this year, as he pledged to trim government spending if he wins next month’s election.

“The situation is not good,” Rajoy said in an interview with Cadena Cope today. “It is going to be very difficult for them to meet that 1.3 percent this year.”

Rajoy’s People’s Party, the favorite to win the general election on Nov. 20, has governed most of Spain’s 17 semi- autonomous regions since local elections on May 22. Regional administrations are crucial to the nation’s efforts to cut the euro region’s third-biggest budget deficit as they control more than a third of public spending and employ half the country’s public workers.

The regions’ target of 1.3 percent of gross domestic product is part of the overall deficit goal for this year of 6 percent, down from 9.2 percent in 2010. Rajoy said he would scale down public administrations to reduce spending and said it’s a “priority” to avoid cutting pensions. He pledged a “four-year plan” to shrink the deficit and bolster the economy, without giving further details.

Majority in Reach

Rajoy’s PP may win 194 seats in the 350-seat Parliament, compared with 119 for the ruling Socialists, an opinion poll published by El Mundo showed yesterday. That would give the PP an outright majority to legislate alone, something Socialist Prime Minister Jose Luis Rodriguez Zapatero has never had.

Rajoy reiterated pledges to use that majority to overhaul the financial industry and promised changes to tax and labor rules in favor of business. He will name “the best” people to his cabinet, and that may include people from outside the party.

“A change of government will already give a bit of confidence; naming a government of serious, competent people who know what they are talking about and know what needs to be done, helps confidence,” said Rajoy, who is still to name his candidate for finance minister.

--Editor: Andrew Davis

To contact the reporter on this story: Emma Ross-Thomas in Madrid at

To contact the editor responsible for this story: Craig Stirling at

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