Mediafax (Mediafax)
Finance  |  October 07, 2010 10:55:05

IMF: Spain should prepare a plan B in case of failure to comply with budget targets


MADRID (MEDIAFAX) - Spain should prepare a plan B in case it failed to reduce the budget deficit as planned, on Thursday said the director of capital markets for the International Monetary Fund (IMF) Jose Vinals. Informed the Spanish newspaper El Mundo and El Pais.

"Markets have zero tolerance for anything that is associated with a deficit," Vinals said. "Spain has promised to reduce it. If there is any deviation will need to create the necessary corrective action, in the shortest possible time," he said. In a similar vein, this week expressed as the Spanish central bank governor Miguel Angel Fernandez Ordonez.

Vinals also believes that countries that are under scrutiny markets (ie Ireland, Portugal, Greece and to a lesser extent, Spain) "no alternative" and must reduce the high budget deficits. "Countries that do not fulfill (budget targets - note. Red.), They risk serious punishment from markets," he added.

The Spanish government is currently struggling with high budget deficits, which in 2009 reached 11.2 percent of gross domestic product (GDP).

Madrid this year has taken measures aimed at reducing the budget deficit by 15 billion euros (about 368 billion dollars) between 2010 and 2011. These include a reduction in government salaries, freeze pensions or cancellation of birth. Under the plan the government budget deficit should fall to six per cent of GDP in 2011, under three percent of GDP should then get in 2013.

But analysts fear that the government plans to reduce the deficit may complicate high unemployment or low economic growth. With the savings, but the unions do not agree that due to convene in late September a general strike.

Simone Radacicova,

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