The Minister for Finance Michael Noonan says there has been no "softening" in Spain's fiscal targets, and that there was no comparison between Spain and Ireland.
Speaking following a meeting of EU finance ministers, Mr Noonan said that Spain's deficit target over the next 20 months had remained the same: reaching a budget deficit level of 3% of economic output in 2013.
Last night euro zone finance ministers agreed to relax Spain's deficit target for 2012. It will now be 5.3% of GDP instead of the original 4.4% agreed under the EU's recently toughened excessive deficit procedure.
The concession was made following Madrid's announcement 11 days ago that it would not be reaching its deficit target for 2012 because of the effects of the country's recession. The Spanish economy is expected to contract by 1.7% this year.
Asked about a charge that there were double standards being applied and that Ireland and other countries could also argue that austerity measures are not compatible with a recession, Mr Noonan replied: "Spain is not comparable with Ireland. Spain is not in a [bail-out] programme. There are three programme countries, Greece, Portugal and Ireland and obviously the rules and conditions for programme countries have been negotiated, set down and agreed under quarterly reviews. Spain's position is different, but their targets haven't been softened."
Mr Noonan added: "The new targets announced by Spain were not acceptable, and they had to be hardened up. The target for Spain to reach 3% by 2013 has been maintained as the target, but the target announced by their prime minster of getting to 5.8% in 2012 was rejected and the new target is 5.3%. So I don't see any softening in Spain's targets. Their target over the next 20 months is the same target and the intermediary target which they fixed for 2012 has been hardened up."
Mr Noonan said that, even with the revised target for 2012, Spain still had to make a budgetary adjustment of 5.5% to reach its target of 3% in 2013. "That is some high-jump to have to take. I sympathise with the Spanish finance minister trying to find that level of adjustment."
Earlier an Irish Government spokesperson denied that there was any comparison between Ireland and Spain in terms of securing further concessions for Ireland, and that in any case Ireland had been given more time to meet the 3% target - 2015 compared with Spain's 2013.
Respect your commitment, says Rehn
The EU economic affairs commissioner Olli Rehn has said that the EU principle of respecting commitments and obligations should be applied to Ireland's repayment of promissory notes.
He was responding to a question as to whether or not the Government should be given a postponement of paying the next €3.1 billion due under the promissory notes scheme used to recapitalise Anglo Irish Bank and Irish Nationwide.
The motto "pacta sunt servanda" - respect your commitments and obligations - was, he said, a key tradition in EU law.
Each and every member state had to respect the commitments it had undertaken, he said, and this was valid in the case of Ireland as well.
Any possible negotiation on the medium-term to long-term solution to the promissory notes, he said, was a separate issue.
EU freezes Hungary funds over excessive deficit
EU finance ministers decided today to freeze €495m in funds due to Hungary next year in a first case of sanctions over a state's excessive deficit, an official said.
The decision was adopted after tough debate with mainly eastern European neighbours backing Budapest and urging the European Union to delay action by two months, the source said.
More talks planned on financial tax
EU finance ministers have given a muted reaction to plans for a cross-border tax on the finance industry, but agreed to discuss further a proposal stiffly resisted by Britain.
Four decades after US economist James Tobin came up with the idea, the French-led financial transactions tax (FTT) is aimed at raising revenues from financial firms after banks especially benefited heavily from taxpayer help when the US mortgage meltdown triggered the 2008 global financial crisis.
The City of London is home to 80% of Europe's finance industry, and Britain expressed its view during the talks that the initiative had "raised more questions than answers" so far.
But France had already secured backing from Austria, Belgium, Finland, Germany, Greece, Italy, Portugal and Spain before the talks. Afterwards, EU taxation commissioner Algiridas Semeta said that most EU states appeared "keen to go for a European solution".
Talks will again be held in Copenhagen, where finance ministers meet at the end of the month, in a bid to "prevent a piecemeal solution" within the single European market, Semeta added.
Tax questions require unanimity across the 27-state EU, and with further opposition from Sweden, which cited a failed experiment of its own, and the Czech Republic, there is no chance of the tax being taken up across the board.
But a special provision of the EU's Lisbon Treaty does allow for at least one third of the EU's member states to bring in new laws among a smaller group of nations, using so-called "enhanced co-operation".
It was therefore significant that a group of nine has assembled to promote the tax, although to pursue enhanced co-operation they have to try for full backing first.
"You have to think about alternatives and compromises," said German Finance Minister Wolfgang Schaeuble. He added that since Europe imposes VAT on products and services, "we have to think about whether the exemption for financial products and financial services is justified." He added: "I think it is rather not justified."
But Sweden's Anders Borg maintained such a tax would only "increase lending costs, the cost of capital for companies and the cost for governments," saying it would ultimately hit growth.
French President Nicolas Sarkozy announced in January that a financial transactions tax in France would take effect in August, saying it would add €1 billion a year to state revenues. British Prime Minister David Cameron retorted that French banks would simply move to the City of London to escape the tax.
Experts say the tax would be likely to hit any financial institution that has any foothold in the nine countries - thereby affecting London as well.
The nine said in a letter demanding that the EU examine their plans that the tax is necessary "to ensure a fair contribution from the financial sector to the costs of the financial crisis, but also to improve the regulation of markets".
The provision for "enhanced co-operation" has already been used to overcome difficulties in harmonising some aspects of cross-border divorce law, and is also currently the vehicle for a single EU patent.
But Denmark, currently in the EU chair, has stressed that this mechanism may be used only as a "last resort." Diplomats recalled that the patents push is making progress only now after decades in legal limbo following challenges from Italy and Spain on that issue.
