Egypt plans gold fund law, seeks to become regional refining hub    Egyptian pound dips against US dollar in early Thursday trade    Egypt's electricity minister, Copelouzos Group discuss progress on Egypt–Greece power interconnection    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Prime Developments, Osoul for Tourism Development launch EGP 1.25bn CLAN project in Hurghada    Egypt's FM discusses Gaza, bilateral ties in calls with Saudi, South African counterparts    Total financing by FRA-regulated entities hits EGP 640.1bn in June 2025    Egypt, Saudi Arabia reject Israeli plan to occupy Gaza    Egypt prepares to tackle seasonal air pollution in Nile Delta    27 Western countries issue joint call for unimpeded aid access to Gaza    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt, Colombia discuss medical support for Palestinians injured in Gaza    Australia to recognise Palestinian state in September, New Zealand to decide    Egypt, Huawei explore healthcare digital transformation cooperation    Global matcha market to surpass $7bn by 2030: Nutrition expert    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt's govt. issues licensing controls for used cooking oil activities    Egypt to inaugurate Grand Egyptian Museum on 1 November    Oil rises on Wednesday    Egypt, Uganda strengthen water cooperation, address Nile governance    Egypt's Sisi: Egypt is gateway for aid to Gaza, not displacement    Egypt, Malawi explore pharmaceutical cooperation, export opportunities    Korean Cultural Centre in Cairo launches folk painting workshop    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Spain to get longer to reach budget goal

BRUSSELS - Europe will grant Spain an extra year to reach its deficit targets after it outlines further budget savings to finance ministers meeting in Brussels, diplomats said on Monday.
Although no final decision is expected at a Monday meeting of euro zone finance ministers on a bailout of Spain's banks, a wider gathering of EU finance chiefs on Tuesday is set to ease a debt goal that has pressured Madrid to make punishing cuts that are exacerbating a recession.
"Spain's budget consolidation targets will be adjusted to give it an extra year," said one of the diplomats.
"This is not a unilateral move. Spain needs to make the necessary cuts to reach that goal and this will be discussed on Tuesday at the Ecofin (meeting of ministers). I expect the extra year to be granted."
Officials said the European Commission will propose a new deficit goal of 6.3 per cent of economic output for this year, 4.5 per cent for 2013 and 2.8 per cent for 2014.
Madrid had been due to reduce its budget deficit to 3 per cent of gross domestic product by the end of 2013. But a deep recession is putting that beyond reach.
The Commission will make the proposal to the EU's finance ministers on Tuesday, who would then have to agree. At that point it would become binding, two officials told Reuters.
Economy Minister Luis de Guindos will spell out to the meeting his government's plan for a package of up to 30 billion euros over several years through spending cuts and tax hikes that are due to be announced this Wednesday.
A source close to the Spanish government said 10 billion euros of cuts would come this year and that the measures would include a VAT hike, reduced social security payments, reduced unemployment benefits and changes to pensions calculations.
A decision on the full details of a bailout of up to 100 billion euros ($125 billion) Spain has requested for its banks is also due shortly.
A Spanish government source said it would sign a memorandum of understanding on Monday in Brussels regarding the rescue, which would be followed on July 20 by a full loan agreement. As part of that, it will agree to create a single bad bank to house toxic assets from its banking sector.
While Madrid strives to cut its debts and shore up its struggling banks, it has consistently pleaded for help to get down its borrowing costs. Spanish 10-year government bond yields above seven per cent are not sustainable indefinitely.
"At this moment the only institution that has enough money to act is the ECB," Spanish Foreign Minister Jose Manuel Garcia-Margallo said at a conference. "For that reason, the ECB should intervene in markets, it should start massive purchases of public debt so that speculators understand that they will lose their bets against the euro."
The European Central Bank has proved markedly reluctant to revive its bond-buying programme.
Alongside Spain, euro zone ministers will also be confronted with the need to decide on a new structure for cross-border banking supervision, how to use euro zone bailout money, aid to Cyprus and whether to grant concessions to Greece, which has admitted it is missing its bailout programme targets.
A key part of a plan agreed by euro zone leaders at a summit last month is to give the ECB a central role in supervising banks, which would then allow the permanent rescue fund - the European Stability Mechanism (ESM) - to recapitalise banks directly instead of via governments.
ECB President Mario Draghi testifies to the European Parliament before ministers meet.


Clic here to read the story from its source.