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EU ready to ease Spain's deficit pain

EU ready to ease Spain's deficit pain
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Spain could get an extra year until 2014 to cut its debts, the European Commission has said. The potential lifeline came as Spanish borrowing costs once again crept towards the danger zone.

Brussels insists any concession is on condition Madrid reins in its profligate autonomous regions and speeds up reforms.

EU Commission President Jose Manuel Barroso said: “While there is no quick fix, much more can be done to invest in training, better match skills to labour market needs and to shift the burden of taxation away from labour. These measures may not bring immediate results, but they will ensure that, when growth returns, it is job-rich growth that will reduce unemployment.”

In another attempt to relieve Spain’s pain, the Commission also called for direct aid to Europe’s crippled banking sector by tapping into the eurozone’s rescue funds.

Up to now, Germany, has fiercely opposed any collective banking resolution and guarantee system or use of bailout funds without a country submitting to an EU/IMF austerity programme.