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Rajoy and party barons fail to agree on deficit

PP says regions have made “firm commitment” to reducing shortfall

Prime Minister Mariano Rajoy and the regional barons of the ruling Popular Party failed on Monday to reach an agreement on a more flexible means of sharing out the burden of the deficit-reduction target of the regions.

Rajoy tried to broker an accord in a meeting held in the PP’s headquarters in Madrid. According to the premier of Extremadura, José Antonio Monago, who has been critical of what he perceives as being the preferential treatment that Catalonia could receive in terms of the deficit, said that the meeting at least had served for those involved in the debate to put their views across “looking each other in the eye.”

The meeting was held ahead of an expected official announcement on Wednesday by the European Commission of a relaxing of Spain’s deficit target for this year to 4.5 percent of GDP from 6.3 percent. What did emerge from Monday’s encounter was an agreement for the central government to meet with PP-controlled regions individually ahead of a meeting of the Fiscal and Financial Policy Council at the end of June or the start of July.

The PP said the regions had made a “firm commitment” to reducing the deficit. The regions were initially set a deficit target of 0.7 percent of GDP for this year but want a share in some of the slack being afforded by Brussels.