BRUSSELS, May 30 (Reuters) - An extension of the deadline for Spain to reduce its budget deficit to 3 percent of gross domestic product is fully in line with the EU budget rules, EU Economic and Monetary Affairs Commissioner Olli Rehn said on Wednesday.
“There are two reasons why this is fully in line with the provisions of the act and the underling economic analysis,” Rehn told a news conference.
“Spain has met its fiscal structural targets and if the structural deficit goes as planned, the non-correction of the excessive deficit would be due to lower than anticipated growth not due to the lack of fiscal rectitude,” he said.
“Spain is in fact the only country in the euro area for which our forecasts show negative growth this year and next year. The rules of the Stability and Growth Pact enable an extension of the... deadlines in these kind of cases.”
He dismissed suggestions the Commission was being lenient towards Spain and said similar leeway would not be given to Italy. Greece has already been given two extra years, until 2015, to cut its budget deficit to the required level, he said.