Spain to cut spending by 2 bn euros after missing deficit target

Spain’s budget minister said Friday the government would cut spending by two billion euros ($2.3 billion) after it overshot its public deficit target last year.

“We missed (our target), and so we are starting… to implement the corresponding plans,” Cristobal Montoro told reporters after announcing the cuts to Spain’s central budget.

But he said the cuts did not “affect social spending or spending on items linked to security.”

The country’s public deficit stood at 5 percent of gross domestic product last year, far higher than the target of 4.2 percent set by Spain’s conservative government.

This made 2015 the eighth consecutive year Spain overshot its fiscal target.

Montoro has previously blamed the fiscal slippage on extraordinary measures like the need to fund an expensive new treatment for hepatitis C, a yawning social security deficit and overspending by regional governments.

The government has predicted the public deficit will fall to 2.8 percent of output in 2016, below the limit of 3.0 percent demanded by the European Union for nations that use the euro single currency.

But there are doubts the country will manage to meet this forecast, with EU finance commissioner Pierre Moscovici warning it is “a bit optimistic.”