Remember when last week Spain disclosed the terms of its 2013 Austerity budget, and everyone, literally, came out of the trunk in the ZZ Top wagon, including Olli Rehn who said Spain had done even more than Europe demanded, which led many to believe this was the basis for Spain preparing to announce its bailout request? Well, today Europe is kinda, sorta force to reevaluate said statement, and poor Mr Rehn has to self-flagellate himself in some Helsinki sauna for speaking too fast, because over the weekend Spain preannounced (the first of many) 2012 budget target misses. The Spanish government said the deficit would hit 7.4% of GDP, which misses the 6.3% target set for the year. The 6.3% number in turn, was a "loosened" goal as the original deficit target for the country set by the Commission was 5.3%. What will happen is that at some point, in late December just like in 2011, Spain will say it was only kidding and the real budget deficit will be in the double digits, or about 100% more than the preliminary announced one. But don't worry: in 2013 all shall be well: IMF, ECB, Spain and Princeton economists all over the world promise, so it must be.
From the WSJ [3]:
The European Commission, the European Union's executive branch, said Monday it needed to "analyze" a revised projection of Spain's 2012 deficit that was announced Saturday.
...
A Commission spokesman said that experts would have to look at the revised Spanish figures before responding, but he claimed that the slippage in meeting the fiscal targets was "because of the action taken by the Spanish government vis-a-vis the banking sector."
Yes, there's always something. How inconvenient.
Spain is in the early stages of a banking-sector overhaul and will receive a multi-billion-euro bailout from its euro-zone peers to recapitalize its banks. A set of bottom-up audits and stress tests of Spanish banks published Friday showed the entire industry needs 59.3 billion euros ($76.2 billion) to be restored to health.
European Commissioner for Economic and Financial Affairs Olli Rehn was in Madrid on Monday to discuss the revised deficit figures, Spain's economic outlook and its banking reform with the country's prime minister, finance minister and governor of the central bank, the spokesman said.
In other news, over the weekend we also "learned [4]" that Spain's debt-to-GDP will rise to 90.5% from 85.3%. Because there is always something. Of course, Zero Hedge readers knew that the Spanish official debt figures were total BS back in March when we presented the true breakdown of all Spanish liabilities, contingent and otherwise. The Mainstream Media is only 6 months behind us on this one (see here [5]and here [6]). We give them 1 year before they realize that the real Spain debt/GDP number is 146 [6]%.