Spanish Prime Minister Mariano Rajoy would rather talk about the economy

Spain today woke up amid newspaper front pages and politics commentators split in two sides over Prime Minister Mariano Rajoy’s speech on Thursday. Rajoy appeared in a plenary session of the Congress forced by new revelations about the Barcenas corruption case. But the leader of the government delivered a mostly economy-focused message, although acknowledging his “misplaced trust” in former treasurer of the People’s Party Luis Barcenas–“my mistake” were his words.

Rajoy deliberately shifted the spotlight towards an optimistic view of the country’s future. He said Spain “is about to leave its current recession behind” and reminded his critics that there have recently been many “positive signals” in GDP and unemployment data, which would announce a change of trend.

In the second quarter of 2013, the Spanish economy slowed its fall to -0.1% from a previous -0.8%. “This is a clear step towards our recovery,” said the prime minister.

Rajoy was cautious when talking about unemployment, though, and admitted it is the main problem his government has to tackle. “The economy is improving, but has not yet healed. We must work harder to ensure nothing stops its good evolution,” he added. Analysts agreed that the latest data on job generation, even taking into account the seasonal factor, bring undeniably good news.

The Spanish Prime Minister argued that higher exports rates show competitiveness has been regained, and the risk of a national bailout has been successfully avoided. He refuted the opposition parties’ claim that his government would be short of obsessed over financial markets’ reactions: “to those who repeat again and again that the unemployed cannot eat risk premiums,” Rajoy explained, “they should know that the drop [in debt costs] has given the government a further package of €18.5 billion to spend in social needs.”

The Spanish leader insisted that Spain depends on external credit and everybody must be “exquisitely careful with what picture of Spain” is offered to the markets. “Political stability and a combination of austerity and reforms have already been productive for Spain,” he said, mentioning annual savings of some €6 billion. “The opposite could happen if we make more mistakes,” he concluded.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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