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Economic data piles pressure on Spanish govt

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Economic data piles pressure on Spanish govt
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Gloomy financial news in Spain keeps on coming, amid falls on the stock market.

Latest figures show the economy contracted by 3.6 percent last year, the worst result in decades.

But on a visit to Washington the Spanish Prime Minister insisted his country was what he called financially “solid.”

But there is no getting away from the worsening public finances.

In just two years, Spain went from a budget surplus to a deficit of more than 11 percent. The European Union’s limit is three percent of GDP.

Public debt has also ballooned between 2007 and 2009, and looks set to get worse in the years to come.

The Spanish government has begun consultations with union leaders over a plan to create more jobs and reform labour laws.

Company chief executive Enrique Quemada said:
“There are few training positions at the companies for youngsters. We have got to get young people into the companies and give them a quick start. It makes no sense that a youngster studies and studies, and gets his first job at the age of 27. We have to encourage things so that they start earlier and learn about working.”

Spain is promising to get its deficit down to the three percent level by 2013. But some experts say whether or not the government has the right solution remains the big unknown.