The EU has ordered Spain to rewrite its proposed draft budget over concerns that they would not be able to meet with their deficit goals. 

The budget was, in the opinion of the European Commission, lacking in the necessary spending cuts and tax hikes that would see the country be able to square its accounts and stay within the -3% deficit limits set out by the EU. 

With elections in Spain looming on December 20th, the European Commissioner for Economic and Financial Affairs Pierre Moscovici was worried that the budget was too optimistic, stating that "what counts is to talk about figures. We work on the basis of facts".

According to El Pais, the cuts required could go as high as €10 billion, but speaking from New York, Prime Minister and leader of the ruling Partido Popular (PP) Mariano Rajoy said "Spain will not default on the deficit.

"Spain's economic activity is recovering, employment is recovering, and that means that the tax income is growing so we can, and we have the goal of meeting the deficit".

Spain has been called a model student in its economic recovery, and Rajoy cited the projected 3.1% growth that the country is expecting this year, which is well above the EU average of 1.5%. 

However, with elections in December, coupled with the fact that Rajoy has overseen several years of stringent austerity since coming to power in 2011, he is under pressure to show that all the pain has been worth it.

Rajoy is being squeezed from several sides; sweeping wins for the separatist party Junts pel Sí in Catalonia that called for further autonomy (in particular when it comes to fiscal matters) and the rise of the left wing Podemos party which has become the second largest party in the country despite only being formed in 2014, mean that he will need to prove that the PP have set the country on the right economic path, which will be the determining factor of the elections.

Via El Pais, The Telegraph