URGENT ¥¥¥ Spain cuts budget deficit to 6.7 % in 2012

Prime Minister Mariano Rajoy announced Wednesday that Spain slashed its public deficit to 6.7 percent of economic output in 2012, a drastic cut in the midst of a recession yet still short of a European Union target.

Rajoy's conservative government rammed through unpopular austerity measures and tax increases as it struggled to lower the public deficit to an EU target of 6.3 percent of gross domestic product in 2012 from 9.4 percent the year before.