SPANISH SITUATION:SPAIN IS a proud nation and less than two months ago was looking forward to seeing its prime minister, José Luis Rodríguez Zapatero, standing in the limelight during the country's six months as holder of the rotating EU presidency.
Instead, Mr Zapatero was pushed into the background when he joined his European colleagues in Brussels yesterday. He was left out of the meeting to discuss Greece’s debt crisis attended by European Council president Herman Van Rompuy, German chancellor Angela Merkel, French president Nicolas Sarkozy and European Commission president José Manuel Barroso.
In recent weeks Spain, Europe’s fifth-largest economy, has been forced to defend its own economic credibility as investors and bankers around the world placed it alongside other struggling European countries as the PIGS (Portugal, Ireland, Greece and Spain). And, indeed, recession continues to bite in Spain and unemployment is in freefall.
So painful was the situation last week that Spanish minister for the economy Elena Salgado and her secretary of state for economic affairs were forced to fly to London and Paris to reassure bankers and investors and brief the financial press that investments in Spain were safe.
A prediction by Mr Zapatero in December that the country was facing an “imminent exit” from recession has proved to be mere wishful thinking.
Spain’s economy fell by 0.1 per cent in the last quarter of 2009, making it the only G20 nation still in recession.
The official Spanish statistics agency reported this week that gross domestic product (GDP) shrunk by 3.1 per cent compared with the same period the previous year, and its public debt is expected to rise from 55.2 per cent of GDP in 2009 to 74 per cent in 2012.
Another example of Mr Zapatero’s wishful thinking was his boast this week that Spain was in a better situation than it was six months ago, a statement bitterly received by the half a million workers who have lost their jobs in that period.
Unemployment in Spain stands at almost 20 per cent, making it the highest in the euro zone, with more than four million people lining up at the dole queues.
The government is reluctant to follow Ireland’s example of cutting the salaries of public-sector employees for fear of provoking a confrontation with the unions, which are already up in arms following the suggestion of raising the retirement age from 65 to 67. It was yet another proposal the government was forced to withdraw under union pressure.
Ignacio Toxo, leader of the Workers Commission union (CCOO), warned the government against taking action that would hurt workers.
He said Mr Zapatero’s government was floundering.
“We can’t go on like this. They stagger from one crisis to another. They are like a bunch of incompetent amateurs,” he said.
