Spain fined US$21 million over misreporting regional budget data

[MADRID] Spain became the first European Union state to be fined for misreporting budget data in a landmark ruling over incorrect statistics.

The government will have to pay 18.9 million euros for the manipulation of deficit data in the region of Valencia, the European Council said Monday after a recommendation made by the European Commission in May.

The fine follows an investigation by the commission, EU's executive body, which found "serious negligence" in the handling of official data by the regional statistics office, forcing Spain to revise its national deficit in 2011.

The decision on Spain comes as Greece faces yet another deadline in its bid to win a bailout. Its crisis began when the government there revealed it had understated its budget deficit and would have to adjust it.

The Spanish government appealed the fine on the grounds that it was applied in a retroactive manner, and insisted the misreporting was dealt with immediately and referred to Valencia data only, not the Spanish national statistics office.

BLOOMBERG