"The government has acted according to the announced plan," Prime Minister Mariano Rajoy said after setting off a firestorm for saying Spain's 2012 deficit target would now be 5.8 percent of gross domestic product, rather than the originally pledged 4.4 percent goal.
"We are scrupulously complying with our commitments," he said, arguing Spain still intended to hit its promised public-deficit goal of 3 percent of GDP in 2013.
The European Commission, the EU's executive body, said Monday Madrid was engaged "in a serious deviation."
Asked Monday if he agreed with other EU leaders on the 5.8 percent figure, Rajoy said: "I don't agree or fail to agree with [the EU]. I do what seems sensible to me."
The Spanish government said Feb. 27 its budget deficit was 8.5 percent in 2011, well above its earlier-projected 6 percent figure.
EU Economic Commissioner Olli Rehn, through a spokesman, called the 2011 deficit difference a "serious, grave" gap.
After Rajoy said Spain would not meet deficit-reduction targets required by Brussels, the Spanish autonomous communities of Andalusia and Catalonia said they too would need flexibility to meet deficit goals required by Madrid.
Rajoy responded, saying he already eased their deficit targets 0.2 percent and would consider no further relaxation.
The autonomous communities are not controlled by Rajoy's conservative People's Party.
Rajoy announced Friday, after a two-day summit in Brussels, he intended "to reduce the deficit from 8.5 percent to 5.8 percent," which he said was still "significant austerity," even if it didn't meet the earlier 4.4 percent pledge.
He said he did not consult other European leaders about the step, which he described as a "sovereign decision by Spain."
His unexpected announcement came on the day 25 European leaders signed a new fiscal pact meant to further entrench budgetary discipline.
The new standoff came as Greece raced against the clock to sign up willing creditors for writing down half of its debt to private lenders.
Athens has until Thursday evening to conclude a debt swap with its private creditors, reducing its obligations by $132 billion as a central element in its new $172 billion bailout accord with the eurozone.