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The Spanish government has yet to release official figures but says the deficit for 2011 will come in at around 8 percent of GDP, rather than 6 percent as forecast by the Socialist administration it ousted in November elections.

Of the three bailed-out countries, only Ireland offered some glimpse of hope. While Greece and Portugal were expected to remain in deep recessions, Ireland’s economy was forecast to grow 0.5 percent this year, on top of 2011’s 0.9 percent growth.

Rehn said many of the measures being taken across Europe are “essential” for financial stability and to establish conditions for more sustainable growth and job creation.

“With decisive action, we can turn the corner and move from stabilisation to boosting growth and jobs,” Rehn said.

Rehn also reiterated a previous call on the euro countries to boost the currency union’s bailout funds so prevent a further spread of the crisis.

“The past one and a half years have shown that this call was more than justified,” Rehn said.

Under current plans, the lending capacity of the eurozone’s bailout funds is capped at €500 billion ($662 billion), of which more than €150 billion ($198 billion) have already been promised to Greece, Ireland and Portugal.

Eurozone leaders will have to decide next week whether they will keep the money remaining in the interim bailout fund, the €440 billion ($582 billion) European Financial Stability Facility, available once the permanent €500 billion European Stability Mechanism comes into force in July.

Germany has so far rejected this proposal, though the Commission believes that a bigger firewall could protect vulnerable economies like Italy and Spain.

The wider 27-nation EU, which includes non-euro countries, is expected to post flat growth this year. Britain is forecast to eke out growth of 0.6 percent, while Poland is expected to post a 2.5 percent expansion, the highest rate across the EU.

Pylas contributed from London.