Source: Spain Defies EU on Deficit, Jonathan House, WSJ 3/3-3/4

According to the Wall Street Journal, Spain’s economy has worsened as its deficit (5.8% of its GDP) exceeds its pledge to reduce it to 4.4% of its GDP.  Despite the contractions in the economy and high unemployment (23% in January), Spain continues to spend as they believe government spending will benefit their economy and lower the high unemployment rate.

To date, increased government spending has not benefitted Spain’s economy. Instead, they must reform their economy, labor laws, etc., to reduce the deficit.