The euro zone finance ministers' meeting is to continue for the second consecutive day; however, the focus will shift into Spain today after the euro-area ministers reassured that Greece will obtain the second bailout package since the nation met all the requirements set by international lenders.
The conflict between Spain and the rest of the euro zone nations continues, where the euro zone finance ministers in their first test to impose targets on individual countries might fail to force Spain to revise its budget plans as the nation insist on 5.3% targets.
Brussels as a start imposed deficit targets of 4.4% of GDP for Spain this year; however, the new Spanish government, led by Mariano Rajoy, clarified that the Spanish target will be at 5.8%, which in result made finance chiefs to revise their targets to 5.3%, but till now both parties reached no deal.
The group of finance ministers, led by Jean-Claude Juncker, said in statement that the timely correction of the excessive deficit should be ensured by an additional frontloaded effort of the order of 0.5 percent of GDP, beyond what has already been announced by the Spanish authorities so far, and by an early adoption and strict implementation of the new mechanisms in the Budget Stability Law on the monitoring and control of budget compliance at different levels of government. The Spanish government expressed its readiness to consider this in the further budgetary process.
Euro area finance chiefs attempt to force Spain to reach more difficult targets in 2012 in order for the nation to compensate the worse than expected deficit in 2011, where the fourth largest economy in the euro recorded 8.5% deficit last year, above suggested targets of 6.0%. In addition, Spain is currently struggling with the highest unemployment rate in the euro zone as the country already slipped into recession.