Rajoy cautiously optimistic on Spanish economy

Mariano Rajoy offered a note of cautious optimism about the Spanish economy in his first state-of-the-nation debate as prime minister and called for a cross-party consensus in the fight against corruption.

“We’ve left behind us the threat of disaster, we’re starting to see the clear road to the future,” Mr Rajoy told congress as a debate got under way.

“But there’s a lot yet to be done. Let’s not talk about green shoots of recovery.”

The two-day debate, which ended yesterday, is a major event in the Spanish political calendar. It was also a rare chance for Spaniards to see the camera-shy Mr Rajoy, who took power in December 2011, speak in public at length.

Insisting that his conservative government’s austerity policies had slashed the deficit from 9.0 per cent of GDP to under 7.0 per cent in 2012, thus averting economic meltdown, Mr Rajoy also presented a series of measures aimed at stimulating growth.

These included a tax break for new small companies, plans to give firms access to €32 billion in credit, and a new part-time labour contract for jobless young people.

While Mr Rajoy was applauded throughout his 90-minute address by members of his Partido Popular (PP), which has a congressional majority, the opposition was unimpressed.

Jobless rate

“Nothing is better than a year ago and everything that is important is worse,” said Socialist leader Alfredo Pérez Rubalcaba, pointing to a jobless rate that has soared to over 26 per cent and an ongoing recession. “In 14 months you have destroyed the political capital that you won at the ballot box.”

Other opposition politicians reprimanded the prime minister for not focusing in his speech on rising poverty or a housing crisis that has seen a reported 350,000 families or individuals evicted from their homes since the economic crisis started in 2008.

Besides the government’s record on the economy, corruption was the other main issue going into the debate. Allegations have been dogging the PP that for years it ran a slush fund financed by illegal donations from construction firms and that party members, including Mr Rajoy himself, received under-the-table payments.

The prime minister refused to address these accusations, calling for a cross-party accord to battle corruption in general and stiffen sanctions for offenders. To the barracking of opposition politicians, he said Spain does not have a fundamental problem with corruption.