Spain economy shrinks in second quarter; forecasted to contract 1.7% this year
Spain's economy shrank further in the second quarter but looks set to stabilise over the rest of the year while the government continues to push structural reforms and budget austerity, Economy Minister Luis de Guindos said.
European leaders on Friday agreed to allow the Euro zone rescue fund to inject aid directly into problematic banks, bypassing the sovereign government, and intervene on debt markets to support Treasuries facing high funding costs.
The accord was trumpeted by European newspapers as a triumph for Spain and Italy, under siege by nervous investors, and as a defeat for German Chancellor Angela Merkel, who has resisted using common Euro funds to support troubled economies.
Merkel has argued Euro zone members must be responsible for turning around their own economies and warned yielding aid terms could prompt European politicians to ease off on unpopular reform measures and spending cuts.
“Everyone has come away from this important summit a winner. It is the Euro which has won. From now on, we must all contribute,” de Guindos said during an event at conservative think tank FAES.
“The Spanish government is committed to austerity, with a difficult budget correction, and economic reforms which are essential for growth ... it's a process which must continue.”
Spanish GDP shrank by 0.3% quarter on quarter in the first three months of the year. The government expects the economy to contract by 1.7% year on year in 2012 but many analysts have warned deep austerity measures could make the slump worse.
The conservatives, who inherited from the outgoing Socialists one of the euro zone's highest public deficits, at 8.9 percent of GDP in 2011, have said they will shrink the shortfall to 5.3 percent this year and 3 percent in 2013.
Suggested Stories
-
Jun 19th 2013
G8 summit agrees on new measure to clamp money laundering and corporate tax avoiders
-
Jun 19th 2013
Paraguayan president elect Cartes will visit Spain and European Union institutions
-
Jun 19th 2013
Argentina bans British made ejection seats from local jet trainer IA-63 Pampa III
-
Jun 19th 2013
Malvinas C24 Argentina petitioners: Maria Angelia Vernet and Alejandro Betts
4 comments Feed
Note: Comments do not reflect MercoPress’ opinions. They are the personal view of our users. We wish to keep this as open and unregulated as possible. However, rude or foul language, discriminative comments (based on ethnicity, religion, gender, nationality, sexual orientation or the sort), spamming or any other offensive or inappropriate behaviour will not be tolerated. Please report any inadequate posts to the editor. Comments must be in English. Thank you.
We can at least expect near the truth from the Spanish Government, unlike the lies from INDEC.
My god, you're such an idiot. As if you can trust those stooges in the Spanish Government. Mr Guindos (ex Lehman Brothers) who intrudoced Spain to their worthless derivative. They are commited to austerity, meaning raising taxes, cut services you pay for and pay the zombie banks, meanwhile let the people eat cake, while useful idiots believe it's a good idea.
Why is it that your first sentence after you quoting the original poster ALWAYS has a disparaging term in it? Do you consider yourself that inferior that you cannot stand anyone having a greater knowledge than you?
Austerity is about not spending more money than you can pay back! Eventually, you get out of debt. Being in debt is bad!
There, a simple lesson on economics in the real world, not the madhouse of many of the countries in South America.
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!