Mariano Rajoy’s PP government is ‘very likely’ to be punished by the European Union for delaying announcing its budget until April – conveniently after Spain’s regional elections on March 25.

In Andalucia, where over half of under-25s are jobless, the PP is expected to break 30 years of Socialist rule at the elections.

But as well as massaging the 2011 deficit figures to make Spain look better, Madrid is accused of dragging its feet when it comes to addressing the recession – and thereby risking longer-term growth.

The EU said action will be taken as soon as data has been analysed.

“It is not that we want to. But if there is a deviation, and it is almost inevitable, then we will have to,” said an anonymous EU official.

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