Zapatero denies that Spain faces debt crisis
Spain’s prime minister says his country is recovering and that focus should be kept on helping Greece.
José Luis Rodríguez Zapatero, the prime minister of Spain, today rejected growing market fears and rumours that his country was facing a debt crisis similar to that of Greece.
Zapatero refuted claims that Spain was having trouble handling its debt and reining in government spending, and that the country would soon apply for a €280 billion bail-out from the European Union and the International Monetary Fund (IMF).
“I don’t think there is any reason whatsoever for saying this, the important thing is the economic indicators we have show there is economic recovery and growth,” Zapatero said.
Tumbling markets
Mounting concerns over Greece’s ability to meet debt payments drove down the value of European stock markets. This morning the euro matched its one-year low against the US dollar that hit last week and traded at $1.3112.
Market analysts said that there were increasing fears that Greece’s debt crisis would spread to Spain and Portugal, adding that traders remained sceptical that the €110 billion in loans Greece is supposed to get from other eurozone countries and the IMF would not solve the problem.
Speaking in Brussels, Zapatero said than such speculation on the eurozone was “totally unfounded and irresponsible”. “It is complete madness. The important thing to me is that if we hear rumours like this, which I think is completely ridiculous, this creates an immediate effect…on our stock market,” Zapatero said.
No need to panic
Zapatero, whose country currently holds the presidency of the Council of Ministers, said that there was no reason for markets to panic over his country’s finances, or those of Portugal, which is struggling to cut its own budget deficit. He also sought to reassure that the EU would go ahead, as agreed to last Sunday (2 May), to approve a bail-out for Greece.
The Spanish prime minister said he had discussed the issue with José Manuel Barroso, the president of the European Commission and Herman Van Rompuy, the president of the European Council, who will chair a special summit of EU leaders on Friday (7 May) on Greece and stability of the eurozone.
“Each and every member of the [eurozone] is going to convert that support into material terms through loans of the appropriate, corresponding amounts of each country so that when we put together all those efforts, Greece will have the appropriate degree of support,” said Zapatero.