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Spain's Mariano Rajoy met with Angela Merkel ahead of a key EU summit to avoid yet another financial crisis. Merkel expressed respect for Spain's steps to cut spending as it battles a crippling deficit.
Spanish Prime Minister Mariano Rajoy, who took power late last year, defended his policies of strict austerity in Spain and said they came in tandem with structural reforms to promote growth.
Speaking Thursday in Berlin at a news conference following talks with German Chancellor Angela Merkel, Rajoy said Spain has to work to create solid foundations for the economy. He said the next four years will be all about economic reforms - a "long and difficult phase."
"We know that a policy of fiscal consolidation together with structural reform will lead us where we want to go: to sustained growth and creating jobs," he said and described the reorganization of the budget as a "national goal."
Merkel repeatedly praised Rajoy's economic policies, saying she was following them "with extraordinary respect."
Rajoy is the latest in a series of national leaders visiting the German chancellor in recent weeks for behind-the-scenes negotiations on a historic fiscal compact designed to bolster the eurozone, with Germany urging completion of the draft at a European Union summit Monday in Brussels.
Focus on growth and employment
Rajoy said he had discussed with Merkel a proposal to use surplus cash from a European pot for economically-disadvantaged regions to create jobs. Spain is among the nations hardest hit by the sovereign debt crisis. At 21.5 percent, the unemployment rate is higher than anywhere else in the euro zone.
Merkel said Germany would be flexible in considering how existing funds should be used. "We will bring that to the debate on Monday," Rajoy told reporters.
Urged on by Germany, most EU nations are expected to agree to surrender some of their power over government spending and submit themselves to outside discipline if they overspend.
Merkel delivered a keynote speech Wednesday at the World Economic Forum in Davos, in which she warned that her country could not shoulder unlimited burdens in helping to overcome the euro zone's troubles.
Author: Dagmar Breitenbach (dpa, dapd, AFP)
Editor: Michael Lawton