-Spanish Prime Minister Mariano Rajoy
Spanish government led by the Prime Minister Mariano Rajoy failed to reach an agreement on more flexible means of how to reach the budget-deficit target of the regions. Spain is likely to need two more years to reduce the largest budget deficit in the European Union, as the latest data showed negative effects of already implemented austerity measures. On Wednesday the European Commission will decide whether to give Spain two more years to bring its budget deficit back within the EU limit of 3% of gross domestic product. Rajoy is struggling to restructure public finance and boost growth in Europe's fourth largest economy. Later this week Spanish national statistics institute INE is due to unveil full first-quarter economic output data, a month after estimating it contracted 0.5%, compared with a 0.8% decline in the prior quarter.
In a separate report French statistics agency Insee showed that confidence among French customers fell more than expected in May, hitting its lowest level since 1987. French monthly gauge of consumer morale dropped by four points to 79 this month, a figure below analysts' forecasts, which claimed for an improvement and a reading of 85. The survey also showed that French households are expecting that the unemployment rate, which is now at 11%, will continue to rise.
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