Spain Has EU’s Largest Deficit, Undermining Rajoy Pickup

Spain’s budget deficit was the largest in the European Union last year, underlining the challenge faced by Prime Minister Mariano Rajoy as he prepares a new plan to foster an economic recovery.

Eurostat, the EU’s statistics agency in Luxembourg, today reported that Spain’s 2012 deficit widened to 10.6 percent of gross domestic product, swollen by the cost of bailing out its banking system. That’s up from 9.4 percent in 2011 and is worse than Greece’s 2012 budget gap of 10 percent. A limit of 3 percent of GDP is imposed by the EU on all members.