“...but demands urgent reforms on pensions, the labour market and a rise in VAT," reports Spanish business daily La Gaceta, following the publication of the EU Commission's budgetary recommendations.

EU authorities will accept Spain's deficit of 6.5 per cent of GDP in 2013 and give the country until 2016 to bring the deficit to below the 3 per cent of GDP target.

But in exchange, Prime Minister Mariano Rajoy's government will have to introduce "efficient measures" to implement additional reforms ahead of an October 1 deadline.