(Updates with further Mas comments starting in second paragraph.)
Feb. 1 (Bloomberg) -- Spain can’t reach its budget goal this year without “destroying” the welfare state, Catalan President Artur Mas told Spanish Prime Minister Mariano Rajoy.
Rajoy didn’t contradict the Catalan leader at their meeting today in Madrid, said Mas, whose pro-business Convergencia i Unio party often votes with the prime minister’s People’s Party in national and regional parliaments.
“If he had told me it was possible I wouldn’t have believed him,” Mas told reporters in Madrid. “There’s only one way of doing it and that’s to destroy everything,” including the “pillars of the welfare state,” he said.
Rajoy has said that Spain will cut its budget deficit to 4.4 percent of gross domestic product this year from the 8 percent shortfall his government estimates it inherited from the previous administration. Budget Minister Cristobal Montoro called on the European Union last month to ease the goal and to take into account data that shows the economy is heading into its second recession since 2009.
Mas also called for unspecified steps to give regional administrations access to similar financing costs as those of the central government. Investors demand about twice as much to lend to Catalonia, the biggest of the 17 states, as to Spain, according to data compiled by Bloomberg.
Mas declined to comment on speculation Barcelona-based Caixabank SA may merge with Madrid-based Bankia SA, saying he didn’t discuss the matter with Rajoy. Caixabank has denied it’s in merger talks.
“They are private entities and they are the ones that have to talk, in any case, about their possible agreements,” Mas said.
--Editors: Jim Silver, Paul Badertscher.
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