Category Archives: Luis de Guindos

Sarkozy strikes again

French President Nicolas Sarkozy renews his attack on the Spanish Economy (photo: Downing Street)

French President Nicolas Sarkozy has this morning renewed his negative comments about the state of the Spanish economy. Fresh from yesterday’s attack on the socialist policies which brought Spain to its knees, Sarkozy this morning said on French Radio: “Do you think the French people want to follow the fortunes of Greece and Spain?”

The comments, although hardly extensive, have hit the headlines in the Spanish media once again. Yesterday’s comments were easily played down by Spain’s Economy Minister Luis de Guindos, as part of an electoral campaign to warn of the dangers of socialism. However, renewing the attack in less than 24 hours is starting to look like the French premier is talking the Spanish economy down – something which Spain’s Government are desperate to avoid as the market views their economy with suspicion.

If yesterday’s comments were unhelpful, then today’s will be downright irritating to Prime Minister Mariano Rajoy and his colleagues, as they try desperately to restore market confidence in their reforms and economic policies.

De Guindos insists bailout not an option

Luis de Guindos - Economy Minister (photo: lamoncloa.es)

A busy day of fire-fighting for Economy Minister Luis de Guindos, who has given a radio interview this evening in which he ruled out the possibility of Spain needing a bailout. After more wobbles for the Spanish economy today, de Guindos said this evening:

“We have not asked for [a bailout] – it is not on the table.”

He later added that a bailout would be the “worst outcome possible” and that it would be “a last resort”.

“Spain cannot lose it autonomy with regard to economic matters,” he concluded.

He also reiterated his earlier claim that Spain’s biggest problem is the uncertainty about the finances of the heavily indebted Autonomous Communities.

With regard to today’s news on the risk premium, de Guindos was quick to point out that Spain is not alone, and that other eurozone countries, notably Italy, also saw their risk premium rise today.

He also downplayed President Sarkoy’s earlier comments on Spain and Greece, saying that they were clearly meant as a critique of the social-democrat politicians which until recently governed in both countries.

The full interview can be listened to here (in Spanish)

Alonso invokes Thatcher’s “bitter medicine”

Spain's economic reforms - A bitter pill to swallow? (photo: li-la-lutz)

With the Spanish economy on the ropes and back in the main pages of Europe’s newspapers today, the ruling Partido Popular has come out fighting in defence of their economic strategy. Earlier Economy Minister Luis de Guindos claimed the problem was more a case of nervousness about Spain’s ability to recover.

Now the party’s spokesman in the Congress of Deputies, Alfonso Alonso, has used the news of the increased risk premium as proof that the Government’s tough General Budget, although a “bitter medicine”, is vital if Spain’s economy is going to recover.

Alonso assured that the Government is not taking these measures “gratuitously”, but rather in response to “an extremely serious” situation. “The austerity drive and the containment of the deficit continue to be essential”, he said to EFE news agency. “This is the bitter medicine that Spain needs to win back confidence”.

Students of British politics might be reminded by Alonso’s last comment of the words of former British Prime Minister Margaret Thatcher who, at the height of her own austerity drive in the 1980s famously said: “Yes, the medicine is harsh but the patient requires it!”

At the time Thatcher’s reforms were deeply divisive and were met with great hostility. It was not for years after that her Government began to be widely credited with restoring credibility to the British economy. So far, the PP have only witnessed the hostility – they will be hoping recognition and vindication will not be too far down the track.

Onwards and Downwards

Economy Minister Luis de Guindos, defending the Government's economic strategy (photo: by mercedesalonso)

Another shaky day for the Spanish economy, as Spain’s risk premium continues to rise – reaching the highest point since December, and since the Partido Popular took power at the end of last year.

Economy Minister Luis de Guindos claimed today that the rising risk premium is down to the markets’ worries about the ability of Spain to recover from the economic crisis. He went out of his way, though, to highlight that this was not a problem confined to Spain.

“What this shows,” he said, ” is that there has been an increase in market nervousness, but it has not been only about Spain. It has affected all the countries of the eurozone. It has been evident in the rest of the eurozone countries which are vulnerable in one way or another.

“It is a problem which is all about the negative perception of economic growth in Spain, Portugal and Italy,” de Guindos added. He went on to defend the measures the Government is taking, especially with regard to the proposed national budget for 2012.

The only slight silver lining today was that the Spanish stock exchange held steady, despite the storm clouds gathering overhead. The Ibex 35 closed down just 0.2%.