In an effort to avoid a sovereign bailout and curry favor with the ECB, Spain will cut spending by $51 billion in ’13, almost 3% of GDP! Amazingly, this belt tightening is occurring during a recession! As a result, the contraction will worsen causing Spain to dramatically overshoot its deficit target of 4.5% of GDP in ’13, which is why they cut the budget in the first place! Go figure.