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Spain Fin Min: EU Could Extend Budget Deadlines

MADRID -(Dow Jones)- With most European Union countries in violation of EU rules on budget deficits, the European Commission could extend the deadlines it has allowed for reining in those deficits, Spanish Finance Minister Elena Salgado said Monday.

"What should be the exception has become the rule, so that [could] lead the Commission to different thinking [on budget deficits], probably in the first quarter of next year," Salgado said at a meeting with journalists and Spanish business leaders.

EU rules require member countries keep their budget deficits within 3% of gross domestic product. Spain had a budget deficit of 3.8% of GDP in 2008 and the Commission, the EU's executive arm, gave Spain until 2012 to bring its deficit back into line with the 3% limit.

But with Spain forecasting its budget deficit will top 9% of GDP this year as it grapples with one of the EU's deepest recessions, most analysts think the government faces an immense challenge to meet the EU's 2012 deadline.

-By Jonathan House, Dow Jones Newswires; +34 91 395 8120; jonathan.house@ dowjones.com

(Adam Cohen in Brussels contributed to this report)

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