Madrid 10 Apr (ANA) - Spain's economy could unravel as the prime minister attempts to shore up support for the 2017 budget a quarter of the year in. Mariano Rajoy is eyeing up a tentative coalition as his best bet for securing backing for his budget, which is crucial to show the European Union (EU) the Mediterranean country is back on its feet. Spain’s economy took a battering after the financial crisis, and followed by two inconclusive elections in 2015 and 2016 its recovery was fragile. Mr Rajoy has just two months to get the budget through parliament, half-way through the year it is supposed to cover. His ambitious budget is based on estimates of strong job growth and a record tax collection, amounting to more than £1 20bn (€200bn), coupled with an increase in social security contributions to hit Spain’s 3.1 per cent deficit target. The country’s public deficit still stands at an eye-watering 100 per cent of GDP, and Madrid has consistently failed to meet its EU mandated targets. Today Chairman of Spain's Banco Popular said the bank needs to address and tackle its "difficulties" as soon as possible. Last year it was short by £ 17bn (€ 20bn), and the government was forced to renegotiate its deficit target from 2.8 percent to 4.6 percent, in line with what it agreed with Brussels. The 2017 budget is seen as crucial, and needs to be passed to ensure stability and strength, but may prove difficult for a government with the smallest parliamentary backing in the country’s recent democratic history.(ANA)

FA/ANA/10 April 2017--------