Maybe it’s because of the condensed format, maybe because he was talking to a non-Spanish newspaper, or perhaps he was just in a particularly open mood, but Mariano Rajoy’s interview with the The Washington Post’s Lally Weymouth seemed unusually revealing. The Popular Party leader, now three weeks away from an apparently certain general election victory, was hardly expansive, but some of his answers were relatively bold for a politician who has made hiding his hand something of an art form. When asked whether he would go beyond Zapatero’s spending cuts, Rajoy is quite forthright: Yes, there is no other way out. I am in favor of reducing all budget items. But the item I don’t want to … [Read more...] about Rajoy vs The Washington Post
recession
Ahead of election, Spain’s next prime minister leaves everyone guessing
Mariano Rajoy, leader of the opposition Popular Party, is set to put two election defeats behind him on November 20 and become Spain’s next prime minister. But his all-but-guaranteed victory (opinion polls suggest the PP will win around 190 seats in the 350-seat parliament, its largest ever majority) has little to do with him. Instead, it has much more to do with a three-year economic crisis, an intractable unemployment disaster and escalating worries about Spain’s debt and public account deficits – problems, compounded, if not induced in the eyes of many, by the economic mismanagement of the current Socialist administration of Prime Minister José Luis Rodríguez Zapatero. Those issues, … [Read more...] about Ahead of election, Spain’s next prime minister leaves everyone guessing
Fear and resignation in Spain’s deficit cap
A swiftly agreed, bi-party accord to safeguard the Spanish economy’s future. It should be music to every Spaniard’s ears. The governing Socialists and opposition Popular Party have finally reached consensus on a major issue, putting aside their ideological differences and petty electoral interests to introduce a constitutional reform that puts a cap on the public deficit. Such statesmanship harks back to the spirit of the Transition. Or does it? Having heeded the plea by the French and German leaders for deficit controls to be enshrined in eurozone magna cartas, José Luis Rodríguez Zapatero and Mariano Rajoy have responded. This extraordinary measure, they argue, will calm the jittery … [Read more...] about Fear and resignation in Spain’s deficit cap
Spain: Too big to fail?
The European Union’s three victims-so-far of the global financial meltdown have, not incorrectly, been described as the economic bloc’s periphery. Their economies are relatively small and, though at times worries about their debts have undermined the euro currency, their problems – even taken in combination – are hardly likely to bring the bloc to its knees. Individually, they were sick from a debilitating cocktail of similar problems: bed-ridden with debt and weak from a bad diet of profligate government spending and loan-happy banks. Nothing, it seemed, that a dose of bailout money from the EU and IMF could not cure with a trip to the emergency ward. Spain is showing similar symptoms. … [Read more...] about Spain: Too big to fail?
With almost five million out of work, Spain’s unemployment crisis rages on
In January 2009, Spain’s then Labour Minister Celestino Corbacho declared confidently that the number of jobless people in Spain would not surpass the four million mark. It took only three months for him to eat his own words as unemployment shot past that psychologically significant level. It has continued to tick upwards ever since. Corbacho lost his job in October last year. Now another minister, Elena Salgado, who holds the economy portfolio and serves as second deputy prime minister, is also putting her credibility on the line. In a press conference on Thursday, she said five-million plus job seekers is not on the cards. “In the opinion of the Economy Ministry that figure will not … [Read more...] about With almost five million out of work, Spain’s unemployment crisis rages on
Spain and Portugal’s right shun austerity and Brussels – for now
It’s easy to see parallels between the governments of Spain and Portugal of recent years. José Luis Rodríguez Zapatero and José Sócrates were both fresh-faced Socialists when they took power in 2004 and 2005 respectively, promising social reforms as well as economic stability. Both were voted in for second terms before running aground on the challenges that arose following the world economic crisis. Like their Socialist counterpart in Greece, Georgios Papandreou, both men have been forced by circumstances to repress their political instincts and introduce heavy spending cuts and painful reforms. In Portugal, where the economic outlook is worse, the opposition’s withdrawal of support for a … [Read more...] about Spain and Portugal’s right shun austerity and Brussels – for now
Inditex: fast fashion for crisis-proof profits
With unemployment around the world high, cash tight and job prospects dim, you would think that buying a new wardrobe would be the last thing on consumers’ minds. But Inditex, the Spanish owner of clothing brands such as Zara, Massimo Dutti and Bershka, still managed to get consumers to open their wallets last year. And open they did. The company, based in Galicia, Spain, reported a net profit of €1.73 billion for its full fiscal year ending January 31, a year-on-year increase of 32 percent. Sales rose 13 percent to €12.52 billion in the 12-month period. The seemingly unstoppable growth of the almost 50-year-old company comes two years after Inditex overtook US chain Gap to become the … [Read more...] about Inditex: fast fashion for crisis-proof profits
Political turmoil threatens to rock Spain’s recovery
Only a few weeks ago, the big argument raging about Spain was whether or not it was “the next Greece”. The size of its deficit, difficulties in getting the economy growing again and its harsh treatment at the hands of international markets all made it look like the prize candidate for the EU’s next massive bailout. Many observers suspected a visit by IMF head Dominique Strauss-Khan to Madrid in June was the prelude to just such a move as José Luis Rodríguez Zapatero’s handling of the economy came under immense scrutiny. Now, however, the situation is slightly different. The bailout has not transpired and while the country has certainly not emerged blinking in the sunlight of market … [Read more...] about Political turmoil threatens to rock Spain’s recovery
Ideology is first casualty of Spain’s economic crisis
The day José Luis Rodríguez Zapatero’s dream ended was not even marked by a speech from the unlikely new champion of glum realism. As Congress in Madrid debated in late May cutbacks effectively imposed by Frankfurt and Brussels, the Spanish prime minister, who had tended his very personal flame of optimism with so many smiling words, saw his political future turn to ashes without even taking the stand. The Socialist who had vowed to bring the benefits of economically successful Spain to the disadvantaged now looked on as Catalan nationalist Antoni Duran i Lleida announced that his bloc would save the government in the vote to cut public workers’ wages and freeze pensions, but declared that … [Read more...] about Ideology is first casualty of Spain’s economic crisis
The curse of the EU presidency
In retrospect, Spain might be seen as one of the unluckiest ever holders of the EU rotating presidency. A host of unfortunate developments – most not of his own making – have conspired to make the first half of José Luis Rodríguez Zapatero’s six-month term, which began on January 1, difficult and at times hapless. With Spain among the bloc’s most economically troubled members, it was always going to be hard for Zapatero to lead the EU out of recession from the front. Moreover, major institutional changes were implemented just as the term presidency was starting, with a degree of mystery surrounding the new system and its roles, including that of European Council president. As if that were … [Read more...] about The curse of the EU presidency