Spain's PM and opposition leader fail to agree joint approach on fiscal crisis

WHEN HE became prime minister more than two years ago Spain’s José Luis Rodriguez Zapatero vowed to hold regular meetings “at…

WHEN HE became prime minister more than two years ago Spain’s José Luis Rodriguez Zapatero vowed to hold regular meetings “at least every six months” with opposition leader Mariano Rajoy.

As the two men hold such differing views, though, it is hard for them to sit down together, much less agree on anything. It was 18 months since they last held a bilateral meeting in the Moncloa Palace, the PM’s official residence.

Only last week the king, who very rarely speaks on political issues, suggested that they should at least meet to find a way out of the current crisis in Spain’s economy.

Spaniards looked with certain envy last month at coverage of the Portuguese prime minister and leader of the opposition sitting together and agreeing on solutions to their economic crisis.

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So yesterday Mr Zapatero and Mr Rajoy finally the got together.

After just over two hours together, they could only agree on the Greek bailout and only succeeded in ironing out minor differences over Spain’s problems, which have resulted in more than four million people unemployed.

At first it was hoped that the two leaders would give a joint press conference – a sign that they were in broad agreement. However Mr Rajoy emerged, alone, to give his version of the morning’s talks and Mr Zapatero only appeared when Mr Rajoy had left.

Mr Rajoy began by saying they had agreed to reform of the regional savings banks which would involve the merging of many of them.

He also gave his support for the European rescue plan for Greece but warned of the danger of sitting back and waiting until it was too late.

With reference to Spain’s crisis, he said that the top priority was a reduction in public spending and he praised Ireland for its courage in taking drastic steps to do so.

Secondly, he stressed the importance of a restructuring of the financial system, including taxation and VAT, which he admitted would be painful.

Finally he spoke of the long-overdue reform of Spain’s labour market which would make it easier to lay off workers and which the employers have been demanding. He criticised the Socialists for “wasting two years” without taking these important measures.

“There is nothing new in these proposals, we have made them many times in the past . . . but time is running out for Zapatero. He must take steps, and now. If he doesn’t, then there is an alternative whenever the Spanish people want to take it.”

Mr Zapatero tried to put a more positive face on the grim financial situation. Spain was, he said, one of the few countries which had not been forced to inject money into the private sector, adding that the decision to restructure the regional savings bank was positive for the economy.

“Spain is on target with its plan to reduce our deficit to 3 per cent by 2013,” he added.

He expressed anger at “evil rumours” suggesting Spain could be the next country needing a bailout and which had forced down the stock market by just over 2 per cent yesterday.