Here We Go Again: Spain Says 2012 Budget Deficit "Will Be Bigger Than First Estimated"

Tyler Durden's picture

Back in December 2011, Europe swooned and bond yields soared when it was shocked, shocked, to learn that Spain had been lying about its budget deficit all year, a number which was subsequently hiked several more times. Then in 2012, to keep up with the pretense that things are better, Spain once again did what it does best: fudged numbers, this time desperate to make it appear that its actual government deficit was better than expected because one had to 'obviously' exclude all those items that are not part of the government spending... like payments for its broke provinces, or indirect funding for its broke banks. Now it turns out that in addition to fudging the definition of "budget", Spain was, surprise surprise, lying once again. From Bloomberg: "The Spanish government said its 2012 budget deficit will be bigger than first estimated after the European Union requested changes in how tax claims are computed. The budget shortfall excluding aid to the banking sector was 6.98 percent of gross domestic product last year, more than the 6.74 percent predicted on Feb. 28, Deputy Budget Minister Marta Fernandez Curras told reporters in Madrid today. That compares with 8.96 percent in 2011."


Spain is seeking an extension from other euro-region governments to reorder its public finances as Prime Minister Mariano Rajoy says output may shrink more in 2013 than the 0.5 percent he initially predicted. That’s a third of the contraction forecast by the International Monetary Fund. Spain is due to submit budget plans through 2014 to the European Commission next month.

Naturally, 2013 is already off to a "good" start:

The central government’s deficit for the first two months of the year widened to 2.22 percent of GDP from 1.95 percent last year, according to data calculated using the new methodology, Curras said.

How long, one wonders, until that number too is revised higher?

In the meantime, we await patiently to learn just how much more cash Europe will be handing over to Spanish banks. The same cash it refused to hand over to the Cypriots, and to prove that in the European animal house, one's "equality" is directly proportional to one's systemic collapse risk:

Eurostat, the EU statistics office, told Spain to compute tax refunds in its national accounting as and when they are claimed instead of waiting for the claims to be checked by tax authorities, Curras said. That means Spain must revise its budget-data series that starts in 1995, she said, without commenting on when the figures will be released.


“Bond markets need to know the country’s exact fiscal metrics,” Justin Knight, a London-based rates strategist at UBS AG, said by telephone. “It’s so difficult to tell what the real numbers are. We’ll have to wait for Eurostat’s release.”


The Budget Ministry delayed tax refunds in the fourth quarter as it intensified controls. Cash-basis data released this month by the national tax agency showed refunds surged 83 percent in January from a year ago after dropping 62 percent in December. Tax refunds declined an average of 7.9 percent in 2012, more than twice as much as in 2011.


“It is a bit of an accounting game,” said Ignacio Conde- Ruiz, a Madrid-based economist who works for the economic research institute Fedea.

You don't say. The bottom line, however, for Spain is quite clear:

The central government’s interest bill surged 15 percent last year to 26 billion euros, while tax receipts slumped 21 percent. The cost of servicing debt represented 30 percent of the taxes collected at the end of December, up from 20 percent a year earlier.

In other words: absolutely unsustainable on an actual, truthful, adjusted, revised, recasted, pro forma or simply fraudulent basis.

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Irelevant's picture





Si se puede?!

Handful of Dust's picture

They're going to lose credibility if they keep doing this.



notbot's picture

Hey Spain, here's a little tip from your Cypriot friends:

Buy physical gold

hedgeless_horseman's picture



...absolutely unsustainable on an actual, truthful, adjusted, revised, recasted, pro forma or simply fraudulent basis

I'm not so sure, infinity is a pretty big number.  All they need to do is hold the zero key down for a few more seconds, hit Ctrl-P, and all is well again, right?

knukles's picture

If I'd behaved like this Euroleadershit when I was a kid my old man woulda beat the crap outta me.

TruthInSunshine's picture

Dear Spanish Citizens,

Please feel free to use my proprietary Bullshit Adjustment Factor ("BAF") in deducing more accurate economic metrics than what you are being "fed" by your deeply captured governmental and quasi-governmental parasitic drain enablers (who are mere puppets of a genuinely private consortium of banking entities as you are now seeing; they'll let you and your children literally starve before they quit transferring your blood to the banking sector).

I developed the BAF primarily with the U.S. economy in mind, as an antidote to perpetual "seasonal adjustments" and other statistical manipulation of U.S. economic data, but when I cross-tested it, it appeared to work just as accurately when applied to the  official data released by the criminal "bagmen & bagwomen" currently in power in any fractional reserve monopoly fiat dependent economic system.




redpill's picture


They should  just change the deficit calculation formula so that the result is that there isn't a deficit anymore.   Problem fixed.  See, wasn't that easy?

Ahmeexnal's picture

Meanwhile, in neighboring Frankenreich, monsieur Hollande tries to bring down massive surge in unemployment:

coupled with out of control crime in Paris:

French Tourism Minister Sylvia Pinel pledged on Tuesday to ensure the security of travellers after 23 Chinese visitors were robbed of their cash and passports shortly after arriving in Paris.


Mon dieu!

TeamDepends's picture

It's les Miserables all over again.

thisandthat's picture

All they need is an hockey-stick graph in there.

Son of Loki's picture

Here is one of the most accurate "Bullshit Amplifier Meters"...I hope it comes thru:

machineh's picture

Memo to Spain: the pain never stops until you LEAVE THE EURO.

Germany can keep crushing you longer than you can stay solvent.

Irelevant's picture

Credibility? LOL!

The masses are completely brainwashed and anesthetized, they will go to the gas chamber orderly, as instructed.

Credibility is not an issue.

NotApplicable's picture

Hey Tylers! Are you working on this story yet? (or did I miss it already?)

GS and Buffett just love to help each other out.

ihedgemyhedges's picture

They just need to subcontract their analysis out to BLS and get the seasonal adjustment experts on it......

Stuart's picture

See that's why the US is so much more clever.  By never having a budget ever again, they eliminate the possibility of ever having being in a position to say that.   Genius they are. 

firstdivision's picture

Who cares?  The SPX will be green and that is all that matters.

Temporalist's picture

Who cares about Spain?  Gays are fucking getting married!  Gays I tell you!  Same sex type gays!

NotApplicable's picture

Well, anybody stupid enough to beg for government control of personal relations are going to be really surprised at exactly what they've "won."

Statism, the disease that keeps on giving.

FL_Conservative's picture

"Statism, the disease that keeps on TAKING."


There....I fixed it for you.

toys for tits's picture

Apparently, gays don't get enough ass-fucking at home.

I hope they win so they can be as miserable as hetero marrieds.

sunnyside's picture

When I think gay, I think Scarlotte Johanson and Jessica Alba in wedded bliss.  That picture works for me.


Stuart's picture

Spain, California,... all the same.'s picture

Suprise, suprise, suprise - Gomer Pyle

pods's picture

Missed it by >< much.


Dull Which's picture

I think the Spanish football teams have been surviving through a tax holiday - apparently they owe the Spanish government over €600million

knukles's picture

So whilst on vacation in Hawaii we were at a luau or however it's spelled and the lady on stage with the dancers looked at me and asked if I knew who "Pele" was. (The god of the fire, volcanoes, etc) and I said "I'll take great Brazilian football players for $1000 Alex"
Some people got no sense of humor when it comes to their own cultural shit. And them dancer guys is very big and strong... The Knuks was suitably intimidated

StychoKiller's picture

Apparently, they didn't beat the lesson into ya, for Pele is a Goddess!

LawsofPhysics's picture

No worries, Mark to Market says this is "not a turning point".  He may be correct as the vast majority of the West is already conditioned to accepting theft as a matter of good policy.

mdtrader's picture

Matters not. The US markets pre programmed to go one way. Up, no matter what!

LawsofPhysics's picture

85 billion per month, indefinitely, and that's the monetization we know about.  That's a rather large military and "spy" agency you have there, what's keeping that afloat, what service are these entities providing, for whom, and what are the revenues being generated? 

earnyermoney's picture

Resource extraction is keeping it afloat.

Coercion is their service. It takes muscle and large guns to ensure the dollar as a medium of exchange.

LawsofPhysics's picture

More of a rhetorical question really, but yes.  Why people think replace one fiat with another will solve anything is beyond me.

Jason T's picture

I have idea!  Just confiscate 50% of all the depositors money in banks.. problem solved. 

Al Huxley's picture

Have you learned nothing from Cyprus?  Confiscate 50% only of all accounts over 100,000 EUR - as long as the 'little guy' is kept whole then it's cool.

Belrev's picture

Meaningless news. It will take exactly 1 nanosecond for ECB to print up their budget deficit and "loan" it to them as bailout.

syntaxterror's picture

Actually, 0.65 nanoseconds.

syntaxterror's picture

This has to be bullish in some way, right?

Abraxas's picture

If everyone runs a deficit, who runs a surplus?

LawsofPhysics's picture

Liekwise, if the earth suddenly becomes like Germany/China and an efficient producer/manufacturer, who is the planet selling to and what are these aliens offering of in exchange of real value in order to replenish the very real input feedstocks?  Yes, totally stupid.

eclectic syncretist's picture

The Federal Reserve runs a surplus of counterfeiting that creates, perpetuates, and inflates the deficits.

natronic's picture

If people can't see this whole thing coming crashing down soon they are living in fantasyland.

conspicio's picture

The bigger question in my mind is if this will be the straw that splits Spain in the long run. Eta and the Basque separatists will use this as a "see, I told you so" moment to terrorize the shit out of their perceived and then real enemy. The Basques do not want to be part of this toppling tower of cards and have made that clear for over a decade with increasing peaceful and violent means. Spain woul likely be forced to give them some autonomy well beyond the current comfort zone, but not let them break free. Eventually, if the Basques go, so go many other regions of Spain, albeit only if they can maneuver free and clear and are granted their autonomy from a reluctant Spanish government who has every incentive to keep them on board for now.

Bam_Man's picture

Spain has a hopelessly bankrupt government that is still running annual deficits of more than 5% of GDP. This is insane. How long do people think this will be able to continue? It is a bankruptcy waiting to happen.

drink or die's picture

I'm assuming everyone in the EU is pulling all their money out of the banks and that it's just not being reported yet.  I mean, you'd have to be insane to leave it in there after Cyprus right?  If they aren't, they deserve exactly what they get.

Bangin7GramRocks's picture

It won't be allowed to come crashing down. They make the rules and they will change them as needed. Invent money, ignore defaults. Whatever it takes. There hasn't been "reality" in the markets in 20 years so why should it start now?