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Economic crisis not over for Spain: EC chief

The president of the European Commission has rejected claims from within the Spanish government that the country has exited economic recession, saying the crisis still lingers for the Spaniards.

 

Jean-Claude Juncker said in an interview published Wednesday that Spain still faces high levels of unemployment and Madrid cannot claim that it has weathered the crisis.

 

“With high levels of unemployment, and of youth unemployment in Spain, even if things improve we can’t tell people, or ourselves, that the crisis is over,” said Juncker in an interview with the top-selling Spanish newspaper, El Pais.

 

The comments by the EU chief clearly run counter to those by Spanish Prime Minister Mariano Rajoy, who has repeatedly assured his people about a certain exit from the crisis.

 

Spain’s economic recession began in 2008 with a collapse in the booming real estate sector. The country experienced economic growth last year, giving the government the opportunity to claim that it has left behind the economic crisis.

 

However, Junker insisted that sky-high unemployment rates remain the biggest problem for Spain and as long as the country has not resolved the issue, official statements claiming to have overcome the recessions could not be viewed as “honest.”

 

“What is honest, is to say that we will continue to face serious difficulties as long as unemployment does not return to normal levels. We are in the middle of a crisis. It is not over,” Junker said.

 

Spain’s ruling Popular Party is facing a tough challenge to garner public support ahead of general elections which is slated for the end of the year as the emerging Podemos party has considerably improved its ranking in the opinion polls over the past months. The far-left party has vowed to stage a massive fight against state corruption and revoke government policies aimed at reducing public spending and squeezing salaries and pensions.  

 

The party’s base of support was further boosted in January, when its ally in Greece, Syriza, won the general elections.

 

Many blame Rajoy for the surge in popularity of far-left parties, saying that under his rule, the unemployment rate has jumped, workers have increasingly been hired based on low-paid short-term contracts and salaries have significantly dropped.

 

Structural reform

 

Spain experienced a 1.4-percent economic growth last year, with many attributing it to higher rates of private consumption and rise in investment.  

 

Junker said Spain should take strides to drastically reform the structure of its economy, saying that such a reform would certainly take time.

 

Spain is the fourth-largest economy in the eurozone. The government predicts that growth for 2015 would rise to 2.4 percent from its previous estimate of two percent. However the country’s unemployment rate in 2014 stood at 23.7 percent, the second highest in the eurozone after Greece.

 

Millions of people were thrown out of work in Spain after the property burst in 2008 which forced the government to enforce austerity measures and bail out the financial system.

 

Despite a relative fall in the jobless rate, economists predict that Spain could not slash it below 20 percent until at least 2020.

 

Known as a member of the economically struggling group of EU countries called PIIGS – Portugal, Ireland, Italy, Greece and Spain – the country is hugely indebted to international creditors as it borrowed 41.4 billion euros in 2012 to finance its collapsing banking sector.

 

 

World media monitoring

 

 

 

 

13.03.2015

 

 

 
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