The European Commission could fine Spain’s new government for allegedly exaggerating last year’s deficit figures so that the current year’s data would look better, according to sources quoted by the Reuters news agency.
That would be a blow to centre-right Prime Minister Mariano Rajoy who, Spanish officials say, had hoped to be given leeway on the country’s deficit target in return for bringing in sweeping economic reforms.
Responding, the Spanish government said that it stands by the deficit figure it inherited from the previous centre-left government.
According to the report European officials also believe the government has deliberately delayed publishing its 2012 budget until late March.
That is because it wants to avoid revealing austerity measures that would hurt its chances of winning an election in Spain’s biggest region Andalusia next month.