Europe’s budget enforcers proposed easing the pressure on Spain to cut the deficit, backing further away from the austerity-first mantra that has dominated the response to the sovereign-debt crisis.
As a general strike against austerity hobbled Spain’s industry and transport system, the European Commission said Spain doesn’t need to compound the budget-cutting pain in 2012 or 2013 and indicated the country would be eligible for a credit line to shore up its public balance sheet.
“Spain has taken effective action,” EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels today. Asked whether Spain meets conditions for aid, he said: “Spain is on track as regards taking policies that will help restore its competitiveness and health of public finances.”
Today’s announcement follows concessions to Greece, Portugal and Spain itself, in a further shift away from the fiscal retrenchment that critics say has spread recession across southern Europe and exacerbated the crisis.
Still, Rehn said “the measures announced so far for 2014 fall short of what is required.”
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